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HMRC internal manual

Compliance Handbook

HM Revenue & Customs
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Penalties for inaccuracies: in what circumstances is a penalty payable: inaccuracy due to another person

You must check the date from which these rules apply for the tax or duty you are dealing with. See CH81011 for full details.

A person (P) may have to rely on another person (T) to supply information to enable them to give us, see CH81050, a document of the kind described in CH81060. If P’s document is inaccurate, whether or not because of the information supplied (or not supplied) by T, and the conditions at CH81070 are satisfied, P may be charged a penalty.

In addition, T may be charged a penalty, see CH81165, where all the following conditions are satisfied.

  • P gives us an inaccurate document, and 
  • the inaccuracy amounts to or leads to

    • an understatement of a liability to tax,
    • a false or inflated statement of a loss, or
    • a false or inflated claim to repayment of tax, and 
  • the inaccuracy is because T deliberately (CH81150) supplied false information to P, and 
  • T knew using the false information would make P’s document inaccurate.

T can supply the false information directly to P or indirectly through another person.

The penalty charge also applies where, rather than supplying false information, T deliberately withholds information from P where they know this will make P’s document inaccurate.

A penalty may be charged on T whether or not P is charged a penalty in respect of the same inaccuracy.

Detailed guidance is at CH81165-67.