The following Employment Tax guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:
Under the penalty legislation introduced by FA 2007, Sch 24 where an inaccuracy has occurred on a return or other document which leads to an understatement of tax, the taxpayer is exposed to a penalty. In relation to PAYE returns, the employer is the taxpayer for these purposes.
The rate of the penalty is based on the behaviour of the person and whether the disclosure of the error was prompted by HMRC. Once the rate has been calculated, this is then applied to the potential lost revenue (PLR), which is the extra tax due as a result of correcting the inaccuracy or under-assessment in order to determine the amount of the penalty due.
The behaviour of the taxpayer is covered in more detail in the Calculating the penalty for inaccuracies in returns - behaviour of the taxpayer guidance note. The PLR is discussed in the Calculating the penalty for inaccuracies - potential lost revenue guidance note. The quality of the disclosure made to HMRC is covered in the Penalty for inaccuracies: reductions guidance note.
The taxpayer can be held liable for an inaccuracy in return prepared by an agent.
However, the taxpayer is not liable to a penalty in relation to anything done or omitted by the agent if HMRC is satisfied that the taxpayer took reasonable care to avoid an inaccuracy. This would mean that the taxpayer would need evidence that reasonable care had been taken over the tax affairs. For a discussion of reasonable care, see the Reasonable care - inaccuracies in returns guidance note.
Therefore HMRC must be able to demonstrate that the taxpayer did not take reasonable care. If the taxpayer appointed an agent who was not competent to look after his affairs, this would not demonstrate reasonable care. An example might be where a taxpayer appointed a local accountant with no experience of international tax issues to look after a major corporate restructure because the agent was
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeWithholding tax may be reduced under double tax treaties (DTT) or European directives, both of which may be subject to making a formal claim.This guidance note outlines the rules for UK withholding tax, and
This guidance note explains how to calculate the amount of tax that arises under the lifetime charge. In general terms the lifetime charge will apply to individuals who transfer property into a trust that is subject to the relevant property regime. See the Chargeable transfers and Occasions of
Maintenance payments are payments made by a taxpayer to their former or separated spouse for the maintenance of that former spouse or their children. To obtain any tax relief for maintenance payments, one of the couple must have been born before 5 April 1935 and the payments must be made by virtue
Employee benefit trusts (EBTs) are commonly used to support employees’ share schemes and to provide other benefits to employees in the form of pensions and bonuses.Their use has been significantly affected by the introduction of the disguised remuneration rules. Although the statutory exclusions
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.