EM4514 - Penalties: Introduction: "Abatement" and "Mitigation"

Both abatement and mitigation mean 鈥渞eduction鈥� in everyday speech, but they have distinct meanings in the context of our penalties which should be observed to avoid confusion.

(i) 鈥淎batement is a before thing鈥�

Abatement is the exercise, when dealing with a maximum-amount penalty (see EM4506), of taking that maximum and reducing it for Disclosure, Co-operation and Seriousness.

  • Abatement is HMRC鈥檚 method of arriving at the appropriate level for the penalty in any particular case, within the statutory maximum.
  • Abatement derives from TMA70/S100(1).
  • Abatement is done in contemplation of either a contract settlement (in calculating the expected offer) or a formal penalty determination.
  • The procedure is at EM6051+.

(ii) 鈥淢itigation is an after thing鈥�

Mitigation is the HMRC Board鈥檚 general power to reduce any penalty at TMA70/S102

A taxpayer may make a plea for mitigation of a penalty

  • after a penalty has been formally determined, and
  • after the taxpayer has exhausted (or abandoned) his appeal rights.

The procedure is at EM5310.