Overview
- Media outlets, which published detailed reports on Friday, described a formal HMRC notice that would give taxpayers a set time to correct mistakes before the error can be reclassified as deliberate.
- Under HMRC’s examples, careless or ‘innocent’ errors could attract penalties around 30% of the tax owed while reclassified deliberate errors could reach up to 100% and trigger longer lookback investigations.
- The proposals would let HMRC in some cases reopen assessments as far back as 20 years instead of the usual six years for non-deliberate mistakes.
- Tax advisers warn ordinary taxpayers who file without professional help could be exposed because HMRC may apply hindsight when judging when someone should have known about an error.
- The measures are published for public consultation through early September with no implementation date set and stakeholders are being invited to respond before any draft legislation is produced.