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HMRC internal manual

Compliance Handbook

HM Revenue & Customs
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Charging Penalties: establishing penalty behaviour: evaluating evidence: evidence of a careless inaccuracy

You may identify a number of elements which individually or collectively may indicate that the inaccuracy was due to the person not taking reasonable care, such as

  • not enough time given to maintaining the necessary records
  • no check of the figures
  • advice not sought where necessary
  • uncritical acceptance of advice
  • not giving an adviser or HMRC the full facts when seeking advice
  • not checking the work done by an adviser
  • not acting on the advice given
  • not using the records or systems at their disposal
  • relying on unreasonable estimates
  • relying on uncorroborated statements from third parties.

Further guidance on and examples of careless inaccuracies are in the technical guidance CH81100.

In order to conclude, on the balance of probabilities, that there was a failure to take reasonable care, you must be able to present evidence and a reasoned argument to show

  • the steps that, if taken, would be considered reasonable care
  • that there was a failure to take those steps
  • why it was reasonable to expect the person to take those steps, taking into account their abilities and circumstances.