Penalties for inaccuracies in returns—introduction to the regime
Produced in partnership with Philip Rutherford
Penalties for inaccuracies in returns—introduction to the regime

The following Tax practice note produced in partnership with Philip Rutherford provides comprehensive and up to date legal information covering:

  • Penalties for inaccuracies in returns—introduction to the regime
  • The penalty regime for inaccuracies in returns
  • Commencement dates
  • Taxes to which the current penalty regime applies from 1 April 2009
  • Taxes to which the current penalty regime applies from 1 April 2010
  • Events triggering penalties
  • Inaccuracies
  • Under-assessments

Penalties for inaccuracies in returns—introduction to the regime

FORTHCOMING CHANGE relating to inaccuracy penalties: Following an initial discussion document that was published on 2 February 2015, HMRC is consulting on a number of proposals to change the rules on tax penalties, both as part of its 'Making Tax Digital' reforms and more generally. Changes to inaccuracy penalties will be covered in subsequent consultations (no timescale is given for when these are likely to be published or enacted).

This Practice Note introduces the penalty regime for inaccuracies in tax returns. The regime applies to most taxes, including VAT, but for an overview of all the penalties that can arise in relation to VAT (including those described in this note), see Practice Note: VAT penalties. For information on the application of these rules in relation to offshore matters, where the sanctions may be increased, see Practice Note: Offshore tax evaders—offshore penalties and other civil sanctions.

Penalties for failing to notify HMRC that a tax liability has arisen are covered in Practice Note: Penalties for failure to notify a liability to tax.

For information on how to appeal once HMRC has imposed a penalty, see Practice Note: Appealing an HMRC decision.

The penalty regime for inaccuracies in returns

As part of its modernisation of powers, deterrents and safeguards, HMRC introduced the current penalty regime for errors in returns and documents with effect from

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