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Issue:
4478
/
Categories:
Comment & Analysis
, Admin
, Business
, Capital Gains
, Companies
, Income Tax
, Self assessment
, VAT
Careless error penalties: their application and consequences
KEY POINTS
- Careless penalties do not result in publishing names or managing serious defaulters so successfully arguing carelessness rather than deliberate behaviour is valuable.
- HMRC may request evidence showing whether the taxpayer took reasonable care.
- Penalties for carelessness may be suspended for up to two years pending the taxpayer meeting specific conditions.
- Failure to demonstrate compliance with the suspension conditions results in the penalty becoming payable.
The penalties for errors regime in FA 2007 Sch 24 was introduced for periods beginning after 1 April 2008 where returns are due for filing after 1 April 2009. Case law in this area is still relatively new but some decisions shed light on carelessness and penalty suspension.
The latter was devised as a way of dangling a carrot of no penalty in exchange for...
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