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04 April 2017
Issue: 4594 / Categories: Tax cases

Promo International Ltd (TC5654)

Careless or deliberate error penalties

HMRC carried out a series of compliance visits to check specific VAT returns (usually those for repayments). Officers dealt with the company accountant C because the directors spent a lot of time in the Hong Kong office rebuilding the business after a major fraud. The accountant was qualified and deemed ‘competent and trusted’.

During the visits HMRC found errors on the VAT returns resulting in underpaid VAT for June 2012 September 2012 and June 2014. C had completed the returns. HMRC issued a 15% careless error penalty for September 2012 and imposed a 35% penalty for the June 2014 errors on the ground they were ‘deliberate not concealed’. The mistakes related to simple matters including import duty claimed as VAT carry-forward input tax and output tax figures not properly reversed and German VAT claimed on a UK...

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