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HMRC internal manual

Compliance Handbook

Charging penalties: establishing penalty behaviour: evaluating evidence: evidence of a mistake despite taking reasonable care

Recognising that most people try to get their tax affairs right, but that people can sometimes make mistakes, is a vital and essential element in the correct application of Schedule 24 Finance Act 2007.

You must not regard a mistake made despite taking reasonable care as either exceptional or inherently unlikely. There will always be occasions where individuals or others have taken their tax affairs seriously but have still got something wrong.

Further guidance on, and examples of mistakes, despite taking reasonable care, are at CH81130 and CH81131. This is not an exhaustive list and you should take into account the exact nature of the particular inaccuracy, together with the person’s abilities and circumstances.

Where an agent or adviser is acting, you will need to consider what steps the person took to avoid mistakes by their agent or adviser. The onus is on the person to satisfy you that they took reasonable care, within their abilities and circumstances, to avoid inaccuracies by their agent. You should expect the person to be able to provide evidence to that effect. There is guidance on this at CH84520 to CH84540.