Incorrect returns or claims may result in a penalty under FA 2007, Sch. 24, para. 1 depending on the behaviour of the taxpayer.

Behaviour-based penalty for providing incomplete or inaccurate information

Not every error in a document may incur a penalty. If a person (P) took reasonable steps to complete a ‘document’ correctly, even if it later turns out to be wrong, then no penalty arises.

An inaccuracy made by P in a document may be:

(1)a mistake made despite the person taking reasonable care (no penalty); or

(2)careless (lowest penalty); or

(3)deliberate but not concealed; or

(4)deliberate and concealed (maximum penalty).

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