The tax penalty regime for incorrect returns now covers all taxes and duties and is based on: The amount of tax understated and The nature of the behaviour/extent of disclosure by the taxpayer. There is no penalty where a taxpayer makes a mistake, having taken reasonable care, but there is a penalty of up to: 30% for failure to take reasonable care 70% for a deliberate understatement 100% for a deliberate understatement with concealment. The penalty is substantially reduced where the taxpayer makes a disclosure (takes active steps to put the problem right) especially if this is unprompted.
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