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SM05100 | Special Measures: Sanctions: Liability for penalties in error in documents given to HMRC

From HM Revenue & Customs · Special Measures

For the purposes of (penalties for errors), where a large business is subject to a Special Measures or Confirmation Notice, an inaccuracy in a document given to HMRC by the large business is to be treated as being due to failure to take reasonable care if:

  • the error relates to a tax avoidance scheme entered into while under Notice

  • the error is partially attributable to a speculative() interpretation of UK tax law at the time the document was given to HMRC

Where one of the criteria above is met, HMRC will treat the inaccuracy as a failure to take reasonable care.

In circumstances where:

  • the inaccuracy is deliberate.

  • the business failed to take reasonable care

  • another law treats the inaccuracy as failure to take reasonable care

Then HMRC will not apply an automatic failure to take reasonable care penalty and will assess the relevant penalty to be applied depending on the nature of the inaccuracy.

FA2016/SCH19/PT3/PARA47-48

FA2007/SCH24/PT3/PARA13