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ACCA Strategic Professional · Advanced Taxation (UK) · Income tax: the comprehensive computation of taxable income and the income tax liability

Brenda submitted a 2025/26 self-assessment return that understated her income tax by £20,000 because she was careless. HMRC opened an enquiry and she made a prompted disclosure of the error. Using the standard penalty rates for errors, what is the minimum penalty?

The minimum penalty is £3,000. A careless error carries a minimum penalty of 15% where disclosure is prompted. Applied to the £20,000 understatement, that gives £3,000. The 0% minimum applies only to unprompted disclosure, and the 30% maximum would give £6,000.

  1. A£0
  2. B£3,000Correct
  3. C£6,000
  4. D£4,000

Explanation

Careless behaviour carries a maximum penalty of 30% and a minimum of 15% for prompted disclosure. The minimum is 15% × £20,000 = £3,000. £0 is the minimum for an unprompted disclosure, and £6,000 is the maximum at 30%.

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