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ACCA Applied Skills · Taxation (UK) · Penalties for non-compliance

A taxpayer who is careless submits an incorrect return and corrects it by prompted disclosure. The potential lost revenue is £10,000. Under the standard penalties for errors table, what is the minimum penalty?

The minimum penalty is £1,500. For careless behaviour with prompted disclosure the minimum penalty is 15% of the potential lost revenue, and 15% of £10,000 is £1,500.

  1. A£0
  2. B£1,500Correct
  3. C£3,000
  4. D£5,000

Explanation

For careless behaviour, the minimum penalty with prompted disclosure is 15%. 15% × £10,000 = £1,500. The £0 option is the minimum for unprompted disclosure, and £3,000 is the maximum (30%).

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