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A4.569 Validity of a penalty notice

In penalty cases, it is first for HMRC to prove, on a balance of probabilities basis, that a penalty has been validly assessed (see also A4.590 regarding burden of proof).

For example, the First-tier Tribunal noted in the case of Hansard¹:

'… the burden of proof was clearly on HMRC to show that the penalties were duly incurred and that from the bundle of papers supplied by HMRC we could ask questions of HMRC.'

The decision goes on to say at [37]:

'The penalties may only be cancelled, assuming they are procedurally correct, if the appellant had a reasonable excuse for the failure to deliver the return or make the payment by or before the due date or penalty date and they may only be reduced if HMRC's decision as to whether there are special circumstances was flawed and the Tribunal makes such a reduction.'

Even if the appellant does not question the validity of the notice, the Tribunal will consider it before going on to look