Penalties are applied when a taxpayer fails to take reasonable care to get their tax affairs in order. At the end of an HMRC enquiry, if errors are found, the taxpayer and HMRC must agree the penalty position. Danielle and Riocard note that agreeing the penalty position is not as straightforward as you might think. HMRC penalties are categorised by ‘behaviours’ and it is these behaviours which determines the penalty range a taxpayer faces.
It is crucially important however to seek the assistance of an experienced professional adviser to ensure careless penalties are suspended where possible and fully mitigated where they cannot.
You can read the full article on Taxation here (subscription needed).
We have also commented on the nature of careless penalties in the case of former Conservative Party Chair, Nadhim Zahawi, and his settlement with HMRC in February 2023.
If you need assistance with an HMRC enquiry, or if you need further information or advice, please get in touch with Danielle Ford or Riocard Hoye.