Evidence has emerged that HMRC is taking a tougher approach to penalties that are levied on individuals found to be infringing regulation after a tax investigation.\u00a0\u00a0<\/p>\n
The move is part of the HMRC\u2019s wider mission to tackle tax avoidance and the number of individuals found to be neglecting their tax responsibilities.\u00a0 For the most part, tougher measures are meant as a deterrent for malfeasance, with the potential benefits of tax avoidance outweighed by the penalty risk.<\/p>\n
A few years ago, the tax penalty regime was overhauled to make it fairer \u2013 the basic idea was to apply the same rules across all taxes and to impose a unilateral tariff of penalties.\u00a0 Through this, it aimed to put an end to inconsistency in penalty charges distributed by inspectors.<\/p>\n
However, investigation specialists claim that HRMC has modified its approach in an attempt to maximise penalties.<\/p>\n
Currently, the penalty thresholds correspond to the taxpayer\u2019s behaviour, with a degree of latitude given to the taxman in deciding how the taxpayer acted.\u00a0 The penalty fee corresponds to four distinct patterns of behaviour: took reasonable care, careless mistake, deliberate mistake and deliberate and hidden mistake.<\/p>\n
However, whereas before an individual or company could be given a chance to prove he acted appropriately, investigation experts have warned that HMRC now aims to categorise all errors as at least \u201ccareless\u201d. \u00a0They also found that HMRC will now categorise deliberate errors to include incorrect declarations, if in the past similar transactions have been reported correctly.\u00a0 This means that the penalty resulting from such cases will have a starting point of 35%.<\/p>\n
With HMRC\u2019s new tact, experts are advising taxpayers to be willing to dispute claims of deliberate error in cases where one mistake is made amidst a history of correct declarations.<\/p>\n","protected":false},"excerpt":{"rendered":"
Evidence has emerged that HMRC is taking a tougher approach to penalties that are levied on individuals found to be infringing regulation after a tax investigation.\u00a0\u00a0<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"_links":{"self":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/514"}],"collection":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=514"}],"version-history":[{"count":1,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/514\/revisions"}],"predecessor-version":[{"id":515,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/514\/revisions\/515"}],"wp:attachment":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=514"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=514"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=514"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}