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

Hana submitted her tax return and later discovered that a careless error understated her tax by £8,000. She told HMRC about it before HMRC had any suspicion of it (unprompted disclosure). What is the minimum penalty for this error, using the standard penalty table?

The minimum penalty is £0. For a careless error, the standard penalty table sets the minimum at 0% where the disclosure is unprompted. The 30% maximum (£2,400) and the 15% prompted minimum (£1,200) do not apply to this minimum.

  1. A£0Correct
  2. B£1,200
  3. C£2,400
  4. D£4,000

Explanation

The standard penalty table gives a minimum penalty of 0% for a careless error disclosed unprompted. The maximum would be 30% (£2,400) and the prompted minimum would be 15% (£1,200). So the minimum penalty is nil.

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