Paragraph 27 I1

(1)

This paragraph applies if HMRC propose to assess F1a person to a penalty under paragraph 26 F2....

(2)

If they think it right because of special circumstances, HMRC may take one or more of the following steps—

(a)

reduce the penalty F3...,

(b)

stay the penalty, or

(c)

agree a compromise in relation to proceedings for the penalty.

(3)

“Special circumstances” does not include—

(a)

ability to pay, or

(b)

the fact that a loss of tax revenue from a client is balanced by an over-payment by another person (whether or not a client).

Annotations

F1: Words in Sch. 38 para. 27(1) substituted (1.4.2026) by Finance Act 2026 (c. 11), s. 250(2), Sch. 22 para. 19(a)(i)
F2: Words in Sch. 38 para. 27(1) omitted (1.4.2026) by virtue of Finance Act 2026 (c. 11), s. 250(2), Sch. 22 para. 19(a)(ii)
F3: Words in Sch. 38 para. 27(2)(a) omitted (1.4.2026) by virtue of Finance Act 2026 (c. 11), s. 250(2), Sch. 22 para. 19(b)

F1: Sch. 38 heading substituted (1.4.2026) by Finance Act 2026 (c. 11), s. 250(2), Sch. 22 para. 2

C1: Sch. 38 applied by S.I. 2009/470, reg. 33(1) (as substituted (6.4.2013) by The Education (Student Loans) (Repayment) (Amendment) Regulations 2013 (S.I. 2013/607), regs. 1(1), 9)
C2: Sch. 38 applied (with application in accordance with reg. 1 of the amending S.I.) by The Education (Postgraduate Masters Degree Loans) Regulations 2016 (S.I. 2016/606), regs. 1(1), 24(2)
C3: Sch. 38 applied (with application in accordance with reg. 1 of the amending S.I.) by The Education (Postgraduate Masters Degree Loans) Regulations 2016 (S.I. 2016/606), regs. 1(1), 43(1)
C4: Sch. 38 applied (with application in accordance with reg. 1(2) of the amending S.I.) by The Social Security (Contributions) (Amendment and Application of Schedule 38 to the Finance Act 2012) Regulations 2013 (S.I. 2013/622), regs. 1, 41 (as amended (1.4.2026) by Finance Act 2026 (c. 11), s. 250(2), Sch. 22 para. 35)

F1: Word in Sch. 38 Pt. 4 heading substituted (1.4.2026) by Finance Act 2026 (c. 11), s. 250(2), Sch. 22 para. 17