There was no mechanism within the pre-harmonised penalty regimes to deal with the situation where an error in a return was the result of action by a person other than the one giving the return to HMRC. With effect from 1 April 2009, the penalty regime for inaccurate documents was amended to penalise a third party who deliberately supplies a taxpayer with false information with the intention of causing the taxpayer to submit an inaccurate return1.
To attribute a penalty to a third party, HMRC needs to demonstrate that the third party deliberately supplied false information or deliberately withheld information with the intention that a document supplied to HMRC should be incorrect.
FA 2007, Sch 24, Pt 1, para 1A does not normally cover the situation where an agent merely files the taxpayer's return; in such a case the penalty falls on the taxpayer under FA 2007, Sch 24, Pt 1, para 1 at E4.5312.
For general commentary on penalties for inaccuracy, see A4.530–A4.535.