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Practitioners may learn from recent cases on deliberate errors.
KEY POINTS
- A ‘deliberate act’ is one done consciously with the intention or purpose of submitting an incorrect document.
- The test for deliberate behaviour is subjective and turns on the specific facts which HMRC will assess before determining the penalty.
- High quality taxpayer evidence is usually critical to the likelihood of success in subsequent tribunal hearings.
- Consequences of the imposition of deliberate error penalties.
The level of tax-geared penalties charged by HMRC depends mainly on why an error or failure occurred. Legislation in 2007 replaced the concepts of negligence and fraud with those of careless and deliberate behaviour respectively. The potential penalties are substantial for example:
- Finance Act 2007 Sch 24 and FA 2008 Sch 41 – deliberate penalties for errors and failures to notify liabilities – range...
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