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HMRC internal manual

Compliance Handbook

Penalties for Inaccuracies: Types of inaccuracy: Deliberate but not concealed inaccuracy

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 deliberate but not concealed inaccuracy occurs when a person gives HMRC a document that they know contains an inaccuracy. It is not necessary to demonstrate that the person knew what the accurate figure was, only that they knew that the figure they put on the document was not accurate.

Giving a document is explained at CH81050.

Examples of actions that might lead to a deliberate inaccuracy in a document include

  • systematically paying wages without accounting for operating PAYE or Class 1 NICs
  • knowingly failing to record all sales, especially where there is a pattern to the under-recording, such as omitting all transactions with a particular customer or at a particular time of the week, month or year
  • deliberately describing transactions inaccurately or in a way likely to mislead
  • giving a VAT return to HMRC that includes a figure of net VAT due that is too low because the person does not have the cash at that time to pay the full amount, and later telling HMRC the true figure when they have the funds to pay
  • claiming a deduction for personal expenses of such a size or frequency that the inaccuracy must have been known
  • deliberately not making any attempt to ensure that money withdrawn for personal use from an incorporated business is treated correctly for tax purposes
  • deliberately omitting a known asset from an IHT account (rather than making enquiries about its value) on the basis that the asset can be included in a corrective account later
  • omitting income and gains from offshore assets or investments that have a material effect on the tax liability without taking specific advice from a recognised tax professional to ensure they have been treated correctly for tax purposes
  • deliberately failing to take action that they know is necessary to ensure a return is accurate.

Although the penalties for deliberate inaccuracies are civil monetary penalties, we also have a criminal investigation policy and will refer the most serious cases for consideration of criminal proceedings where appropriate.

For practical examples of deliberate but not concealed inaccuracies, see CH81151.

FA07/SCH24/PARA3 (1)(b)