Mainpay should end any suggestion by HMRC that they can score a ‘knockout’ by identifying an area of carelessness, write Sophie Rhind and Victoria Braid (Macfarlanes).
Everyone makes mistakes but when it comes to your tax position a ‘careless’ mistake can have serious consequences. If HMRC can show that a loss of tax was ‘brought about carelessly’ they can use the extended six-year time limit under TMA 1970 s 36 to issue a discovery assessment. A loss of tax will be ‘brought about carelessly’ by a person ‘if that person fails to take reasonable care to avoid bringing about that situation’ (TMA 1970 s 118(5)). Similarly if an inaccuracy in a document given to HMRC is due to a failure to take reasonable care HMRC can issue a penalty under FA 2007 Sch 24.
‘Carelessness’ is therefore a key concept within UK tax legislation....
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Mainpay should end any suggestion by HMRC that they can score a ‘knockout’ by identifying an area of carelessness, write Sophie Rhind and Victoria Braid (Macfarlanes).
Everyone makes mistakes but when it comes to your tax position a ‘careless’ mistake can have serious consequences. If HMRC can show that a loss of tax was ‘brought about carelessly’ they can use the extended six-year time limit under TMA 1970 s 36 to issue a discovery assessment. A loss of tax will be ‘brought about carelessly’ by a person ‘if that person fails to take reasonable care to avoid bringing about that situation’ (TMA 1970 s 118(5)). Similarly if an inaccuracy in a document given to HMRC is due to a failure to take reasonable care HMRC can issue a penalty under FA 2007 Sch 24.
‘Carelessness’ is therefore a key concept within UK tax legislation....
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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