HMRC internal manual

Enquiry Manual

Penalties: culpability: neglect, negligence and negligent conduct

The terms neglect, negligence and negligent conduct are interchangeable.

Before repeal by FA89, there was a definition of neglect in TMA70/S118 (1).

‘Neglect means negligence or a failure to give any notice, make any return or to produce or furnish any document or other information required by or under the Taxes Acts.’

Baron Alderson in Blyth v Birmingham Waterworks Co, 1856, 11 Ex 781, p784, which was concerned with the law of tort says

Negligence is the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do. The defendants might be liable for negligence, if, unintentionally, they omitted to do that which a reasonable person would have done, or did that which a person taking reasonable precautions would not have done.

We can assume that a reasonable person would, amongst other things

  • comply with the requirements of the law by, for example, notifying their chargeability
  • make, promptly, a complete and correct return of their income and gains when required to do so under statutory authority
  • keep such records as are necessary to enable them to make accurate returns or prepare accurate accounts
  • read carefully the notes supplied with the return form, so far as they affect their own circumstances
  • seek professional help with matters, such as the preparation of accounts, which they are unable to cope with satisfactorily alone.

The longstanding concept in general law of “negligence” can be linked to the concept of “failure to take reasonable care” for penalties under FA07/Sch24. Although it is not binding, the First Tier Tribunal (FTT) case, David Collis v HMRC Commissioners [2011] UKFTT 588(TC), provides a clear link between these two concepts. In this case “reasonable care” was defined as being “that of a prudent and reasonable taxpayer in the position of the taxpayer in question”. For further guidance, see CH53400.