Is ‘careless’ as bad as ‘deliberate’?

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Is ‘careless’ as bad as ‘deliberate’?

By Mark McLaughlin, March 2020

Mark McLaughlin highlights a strange anomaly involving the difference between ‘careless’ and ‘deliberate’ behaviour in taxpayer errors.

Mistakes by taxpayers in tax returns are common but might go undetected until it is too late for HM Revenue and Customs (HMRC) to open an enquiry into the return within normal time limits.

However, HMRC may make a discovery assessment outside the normal enquiry ‘window’ broadly if HMRC can demonstrate that the taxpayer’s mistake was careless or deliberate (TMA 1970, s 29(4)) (N.B. there is an alternative condition, which is not considered in this article).   

How long?
If a tax loss was careless, the normal time limit for HMRC to raise a discovery assessment is extended from four years to six years after the end of the tax year to which it relates. On the other hand, if the tax loss was deliberate, the discovery assessment time limit is

Subscribe to a Tax Insider newsletter to get instant access to the Tax Article library.

Get instant access to 1798 articles and a 14 day free trial!
Subscribe
Begin your tax saving journey today

Each month our tax experts reveal FREE tax strategies to help minimise your taxes.

To get Tax Insider tips and updates delivered to your inbox every month simply enter your name and email address below:

Thank you for signing up to hear from us!