New tax legislation aims to help those who try to comply, and come down hard on those who don’t.
The clear messages for taxpayers from HMRC is:
- If they take reasonable care when completing their returns they will not be penalised
- If they do not take reasonable care, errors will be penalised and the penalties will be higher if the error is deliberate
- Disclosing errors early will substantially reduce any penalty due
The new penalties are for errors on returns and documents initially for PAYE, National Insurance, Capital Gains Tax, Income Tax, and Corporation Tax.
For these taxes, it applies to returns or other documents for tax periods starting on or after 1 April 2008 that are due to be filed on or after 1 April 2009.
Two conditions must be satisfied before HMRC can charge a penalty.
1. The document given to HMRC must contain an inaccuracy that understates liability, includes false statements or an inflated repayment.
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2. The inaccuracy must be careless, deliberate or deliberate and concealed.
There is no penalty if a person takes reasonable care but submits an incorrect return. |
