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Reasonable care

May 2010

HMRC expects that you take reasonable care in preparing information that underpins entries made on your tax returns.

For all returns made for 2009/10 they are entitled to judge the accuracy of your returns based on three criteria:

1. Lack of care
2. Deliberate mis-statement, and
3. Deliberate & concealed mis-statement

If you underpay tax as a result of an incorrectly filed return HMRC are now empowered to charge a penalty which can range up to a maximum of 100% of the additional tax due following an investigation.

If HMRC due consider that you have taken reasonable care, but they still discover tax has been underpaid, no penalty will be charged.