Finance Act 2022

PART 3Supplementary provision

Legitimate activity

8Liability to an electronic sales suppression penalty does not arise where the activity that would otherwise give rise to such liability is undertaken—

(a)by, or on behalf of or with the approval of, a public authority, and

(b)for a purpose connected with avoiding prejudice to the assessment or collection of tax.

Double jeopardy

9A person is not liable to an electronic sales suppression penalty in respect of anything in respect of which the person has been convicted of an offence.

Special reduction

10(1)If HMRC think it right because of special circumstances, they may reduce an electronic sales suppression penalty.

(2)In sub-paragraph (1), “special circumstances” does not include ability to pay.

(3)In sub-paragraph (1), the reference to reducing a penalty includes a reference to—

(a)staying a penalty, and

(b)agreeing a compromise in relation to proceedings in respect of a penalty.

Assessment

11(1)Where a person becomes liable to an electronic sales suppression penalty—

(a)HMRC may assess the penalty, and

(b)if they do so, HMRC must notify the person.

(2)No electronic sales suppression penalty may be notified under sub-paragraph (1)(b) later than the end of the period of two years beginning with the day on which evidence of facts, sufficient in the opinion of HMRC to indicate liability to the penalty, comes to HMRC’s knowledge.

Appeal

12(1)A person may appeal against—

(a)a decision of HMRC that an electronic sales suppression penalty is payable by the person, or

(b)a decision of HMRC as to the amount of any such penalty.

(2)Notice of an appeal must be given to HMRC in writing before the end of the period of 30 days beginning with the date on which notification of the penalty was given under paragraph 11(1)(b).

(3)The notice must state the grounds of appeal.

(4)On an appeal under sub-paragraph (1)(a) that is notified to the tribunal, the tribunal may affirm or cancel HMRC’s decision.

(5)On an appeal under sub-paragraph (1)(b) that is notified to the tribunal, the tribunal may—

(a)affirm HMRC’s decision, or

(b)substitute for that decision another decision that HMRC had power to make.

(6)If the tribunal substitutes its decision for HMRC’s, the tribunal may rely on paragraph 10—

(a)to the same extent as HMRC (which may mean applying the same percentage reduction as HMRC to a different starting point), or

(b)to a different extent, but only if the tribunal thinks that HMRC’s decision in respect of the application of that paragraph was flawed.

(7)In sub-paragraph (6)(b), “flawed” means flawed when considered in the light of the principles applicable in proceedings for judicial review.

(8)Subject to this paragraph and paragraph 13, the provisions of Part 5 of TMA 1970 relating to appeals have effect in relation to appeals under this Schedule as they have effect in relation to an appeal against an assessment to income tax or, if the person is a company within the charge to corporation tax, corporation tax.

Enforcement

13(1)An electronic sales suppression penalty must be paid—

(a)before the end of the period of 30 days beginning with the date on which notification of the penalty was given under paragraph 11(1)(b), or

(b)if notice of an appeal is given, before the end of the period of 30 days beginning with the date on which the appeal is determined or withdrawn.

(2)An electronic sales suppression penalty is recoverable as a debt due to the Crown.

Application of provisions of TMA 1970

14Subject to the provisions of this Schedule, the following provisions of TMA 1970 apply for the purposes of this Part of this Schedule as they apply for the purposes of the Taxes Acts—

(a)section 108 (responsibility of company officers);

(b)section 114 (want of form);

(c)section 115 (delivery and service of documents).

Power to change amount of penalty

15(1)If it appears to the Treasury that there has been a change in the value of money since the last relevant date, they may by regulations made by statutory instrument substitute for the sum for the time being specified in paragraph 5(1), 6(1), 7(2) or 7(3) such other sum as seems to them to be justified by the change.

(2)In sub-paragraph (1), “relevant date” means—

(a)the date on which this Act is passed, and

(b)each date on which the power conferred by sub-paragraph (1) has been exercised in relation to the sum in question.

(3)Regulations under sub-paragraph (1) are subject to annulment in pursuance of a resolution of the House of Commons.

(4)Regulations under sub-paragraph (1) do not apply in relation to an electronic sales suppression penalty to which liability arose before the date on which the regulations come into force.

Interpretation

16In this Schedule—

• “HMRC” means Her Majesty’s Revenue and Customs;

• “tribunal” means the First-tier Tribunal or, where determined by or under the Tribunal Procedure Rules, the Upper Tribunal.