HMRC's Penalty Farming

As noted before on this site, the government is skint and HMRC is looking for ways to increase the tax take.

Accounting Web warn of an increase in zealotry by HMRC wrt its imposition of penalties for errors on tax returns.

AW notes that there is now suspicion in some quarters is, such are the pressures on HMRC to increase tax take, that HMRC are not accepting that genuine mistakes can and do in fact occur:

"Critics point to incorrect tax return cases where HMRC accepts that a taxpayer might have made an innocent error, but still contend that he or she has failed to take reasonable care before signing the tax return.  

In such cases, a penalty of up to 30% of the extra might potentially be charged.  

HMRC also argues that the concept of reasonable excuse (which in the past has typically applied to cases of death of serious illness of a relative or business partner) has no relevance to the new inaccuracy penalty regime."

Are we witnessing the establishment by HMRC of "penalty farming"?

Tax does have to be taxing.



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