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Don’t you just love a good suspense!

By Mark McLaughlin, October 2020

Mark McLaughlin looks at how penalties for careless errors in tax returns can be suspended and ultimately cancelled. 

Tax compliance is difficult and complex. Making a mistake in a tax return is a distinct possibility for many taxpayers. 

Was it a penalty? 

The penalty regime for errors in tax returns, etc. states that no penalty is charged in respect of a tax return error if ‘reasonable care’ has been taken. 

However, penalties can be charged by HM Revenue and Customs (HMRC) if a tax return error was ‘careless’ or ‘deliberate’. A deliberate error is more serious than a careless error, so the level of penalties for deliberate errors can be much higher than for careless errors.  

The amount of penalty otherwise chargeable for a tax return error may be subject to a discount depending on the quality of disclosure by the

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