HM Revenue and Customs 'fell below standard of fair dealing' in way it fines small firms Instead HMRC tended to wait for four months and then send out a letter telling them they had failed to complete their return and were liable for hundreds of pounds of fines and late payment fees. Last night HMRC said that it did not agree with the ruling and that it did not mean HMRC would have to start repaying penalties. A spokesman said: "HMRC does not use small business penalties to boost revenue. We do not want penalty payments either from businesses or individuals. We use penalties purely to encourage on-time filing and to be fair to the vast majority of taxpayers who file on time. The ruling comes after HMRC was widely criticised for being "unduly cosy" with big business. MPs on the House of Commons" Public Accounts Committee found that tax officials have not collected up to £25 billion from big businesses. On top of that, the tax authority was found to have made a series of "sweetheart" deals with major companies, including a decision to waive a £10million bill for American investment bank Goldman Sachs.