New penalties for inaccuracies in returns

The new penalties are mainly introduced to penalise those who deliberately evade tax.
The penalties apply to inaccuracies in returns or other documents for VAT, Construction Industry Scheme (CIS), Income Tax, Corporation Tax (CT), Capital Gains Tax (CGT) and employers’ PAYE (Pay As You Earn) and National Insurance Contributions (NICs).
Penalties are with effect from 1 April 2009.
Penalties for inaccuracies will be a percentage of the extra tax payable (or not repayable) as a result of correcting the inaccuracy. The percentage is based on a number of things including the behaviour that gave rise to the inaccuracy.
In summary, an inaccuracy made by a person in a document or return may be an inaccuracy made despite the person taking reasonable care in which case no penalty will be due.
Penalties for inaccuracies are designed to address the behaviour that led to the inaccuracy.
Penalties for deliberate inaccuracies are therefore higher than those for careless inaccuracies.
There are two deliberate categories within the legislation to reflect different degrees of seriousness. Higher penalties are charged where a person has taken active steps to cover up a deliberate inaccuracy.
Very important to remember is that there is no penalty where the taxpayer makes a mistake despite taking reasonable care.
If a document contains more than one inaccuracy, a penalty will be charged for each inaccuracy. Taxfile‘s tax agents in South London will make sure no inaccuracies are in place when sending your tax return to the Hmrc.