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HMRC internal manual

Compliance Handbook

Penalties for Inaccuracies: Types of inaccuracy: Inaccuracy attributable 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.

An inaccuracy in a person’s (P’s) return or other document may be caused by the action of another person (T). T may be charged a penalty in respect of this inaccuracy, CH81075, if all the following conditions are met.

  • The inaccuracy in P’s document amount to or leads to

    • an under-statement of a liability to tax, or
    • a false or inflated statement of a loss, or
    • a false or inflated claim to repayment of tax, see CH81071.
  • The inaccuracy in P’s document is attributable to T deliberately, see CH81166 

    • supplying false information to P (whether directly or indirectly), or
    • withholding information from P.
  • T knew, see CH81167, that his action would result in P’s document containing an inaccuracy.

In appropriate cases, you should examine the underlying actions or failures that eventually led to the inaccurate information appearing in P’s return or document. You should record your findings. For practical examples of penalties where an inaccuracy is attributable to another person, see CH81168.

Where T is liable to a penalty the Human Rights Act must be considered. You must apply this guidance in conjunction with the HRA procedures at CH300000+.