½Û×ÓÊÓƵ

HMRC has the power to reduce penalties below the statutory levels set by the legislation. This power, known as 'special reduction' is discretionary and may be exercised in cases where, because of 'special circumstances', HMRC thinks it right to do so. The terms 'special reduction' and 'special circumstances' are often used interchangeably.

The power applies in respect to a number of penalties, including:

1. Ìý

   •ÌýÌýÌýÌý penalties for inaccuracies in a document (see A4.530 (generally), A4.580 (partnerships) and A4.586 (third parties))¹

2. Ìý

   •ÌýÌýÌýÌý penalties for failure to notify liability (see A4.540)²

3. Ìý

   •ÌýÌýÌýÌý late filing penalties (see A4.550)³

4. Ìý

   •ÌýÌýÌýÌý late payment penalties (see A4.560)⁴

5. Ìý

   •ÌýÌýÌýÌý failure to correct penalties (see A4.575D)⁵

6. Ìý

   •ÌýÌýÌýÌý penalties for dishonest conduct by a tax agent (see A4.588), but only if HMRC proposes to impose the minimum penalty of £5,000⁶

7. Ìý

   •ÌýÌýÌýÌý electronic sales suppression penalties (see A4.570D)⁷

Special reduction is given in addition to any reduction already allowed depending on the underlying