The Practical Guide to Limited Company Tax
If you have chosen to operate your business as a limited com...
By Jonathan London on 20th April 2015
HMRC could be increasingly likely to conclude that mistakes on tax returns are deliberate rather than an innocent error.
According to the Daily Telegraph, there has been an increase in HMRC officials believing taxpayers are aware of the mistakes they are making and therefore applying more penalties.
However, this could mean many who make mistakes because of carelessness or not understanding could be forced to pay fines as well.
In 2012-13 penalties were issued to more than 5,000 taxpayers on the basis of making “deliberate” errors to avoid tax. This increased to almost 15,000 in the following tax year.
The figures were acquired by Mike Down, a tax investigations expert at accountant Baker Tilly, after he made a Freedom of Information Request.
Mr Down said: “Clearly, deliberately evading tax is a serious matter and HMRC is right to try to tackle it.”
However, he added some officials could be taking a harder line and this could have a significant impact.
“By seeking more deliberate penalties, taxpayers are being hit harder and greater numbers of people are being put at risk of being named and shamed,” explained Mr Down.
At present, penalties for making mistakes on tax returns are applied on a sliding scale – ranging from innocent oversights to deliberate instances where a taxpayer has concealed information.
A statement from HMRC denied that it was incorrect to suggest the rise in penalties could be linked to a need to increase revenue.
“We only issue penalties on the basis of a thorough examination of the facts. We want all taxpayers to get their returns right. The vast majority do so,” added the HMRC spokesperson.
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