HMRC has apparently changed its position on the imposition of a penalty, which had been incurred by a person prior to death, on his or her personal representatives, with reference to the European Convention on Human Rights.

There has been some speculation in recent months on this issue. Hidden away in the “Working Together” news from mid September, HMRC have noted:

• “Deceased Taxpayers and Penalties – S100A(1) TMA 1970
• Where a person who had incurred a penalty died, s100A(1) TMA 1970 allowed HMRC to impose the penalty on the personal representatives of the deceased. HMRC now accepts that S100A(1) was incompatible with Article 6 of the Convention Right and Finance Act 2007, Schedule 24, paragraph 29(b) repealed S100A(1).
• In view of the uncertainty surrounding penalties sought under S100A(1) an undertaking was given to those personal representatives who offered to pay penalties. This was given in a letter which accompanied HMRC's acceptance of their offer to pay. It stated the amount paid in respect of penalties would be repaid should the Department or the courts decide penalties arising from the default of a deceased taxpayer should not be imposed on the deceased's personal representative.
• HMRC has written to those personal representatives who were sent this letter advising them repayment will be made. If your client(s) have entered into a settlement where the letter was issued and you have not been contacted please advise:”