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HMRC internal manual

Compliance Handbook

Penalties for inaccuracies: in what circumstances is a penalty payable: inaccuracy discovered after document sent to HMRC

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

If an inaccuracy by a person (P) was neither careless nor deliberate at the time the document was sent to us, it will be treated as careless if P

  • discovers the inaccuracy at some later time, and
  • does not take reasonable steps to inform us.

You must consider the action P took to tell you of the inaccuracy in order to determine whether or not they took reasonable steps. One of the things you will want to consider is how soon after the discovery of the inaccuracy P told us of it.

Examples of a person taking reasonable steps to inform us are

  • consulting an agent to discuss the position and asking the agent to inform us
  • ringing us to discuss it
  • discussing it with the compliance officer if there is an ongoing compliance check
  • e-mailing, faxing or writing to an HMRC officer with details of the inaccuracy
  • making an adjustment under the error correction regime in the return for the period of discovery, see CH81141.

How quickly after the discovery the person contacted us by any of the above means may influence the decision on whether or not they took reasonable steps.

See CH81143 for examples of “taking reasonable steps” to notify inaccuracies in indirect tax.

FA07/SCH24/PARA3 (2)