HMRC’s efforts to secure penalties in tax planning cases, despite taxpayers having been professionally advised, constituted a flawed approach, argues Iain Macleod (EDF Tax Defence)
Few deny that a tax system needs penalties. HMRC is currently consulting on the topic. It has published HMRC penalties: a discussion document and responses are requested by 11 May 2015.
HMRC’s Compliance Handbook Manual explains the current rules in FA 2007 Sch 24. For example in CHM 81145 it illustrates the careless inaccuracy penalty: ‘When Paul completes his SA tax return he cannot be certain that his figures are correct and is unable to check them. This attitude towards record-keeping indicates a lack of reasonable care.’
TMA 1970 s 95 applies for periods before those affected by FA 2007. Assuming that the return was wrong ...
