ACCA Strategic Professional · Advanced Taxation (UK) · Appropriateness of planning measures to a taxpayer's circumstances and objectives
Which statement about the standard penalty regime for errors in tax returns is correct, based on the penalty table?
A careless error has a maximum penalty of 30% of the tax understated. The minimum is 0% if disclosure is unprompted and 15% if prompted. The other statements misstate the maximum for deliberate but not concealed behaviour or the minimum rates.
- AA deliberate but not concealed error has a maximum penalty of 100% of the tax understated.
- BA careless error with prompted disclosure has a minimum penalty of 0%.
- CA careless error has a maximum penalty of 30% of the tax understated.Correct
- DA deliberate and concealed error with unprompted disclosure has a minimum penalty of 50%.
Explanation
The table gives careless behaviour a maximum of 30%, with minimums of 0% (unprompted) and 15% (prompted). Deliberate but not concealed has a 70% maximum. Deliberate and concealed has a 30% minimum for unprompted disclosure, while 50% applies to prompted disclosure.
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