A6: The UK Tax System and its Administration | Penalties for Non-Compliance (ACCA TX)

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Penalties for Non-Compliance calculates late payment interest and states the penalties that can be charged.

Penalties for Non-Compliance

a. Calculate late payment interest and state the penalties that can be charged.

Penalties imposed are dependent on the tax payer’s behaviour:
  • If the tax payer makes a genuine mistake, no penalties will be applied
  • If the tax payer fails to take reasonable care, a penalty of 30% will be applied
  • If the tax payer makes an error deliberately, a penalty of 70% will be applied
  • If the tax payer tries to hide error, a penalty of 100% will be applied
If the taxpayer makes an unprompted disclosure to HMRC, the penalty may be reduced.
 Quick Tip: Income tax evasion is a statutory offence and may be punished by up to seven years in prison, a fine or both. 

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