Tax penalties can be suspended (and often never paid) more often than HMRC care to admit

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In a recent case, the First Teir Tribunal ordered that a tax payers penalty be suspended despite HMRC arguing the penalty was payable. HMRC often draw unwarranted restrictions on which types of penalties can be suspended.

If you have a tax penalty for a “careless error”, but can take a clear action to ensure the error will not be repeated, the penalty is likely to be suspended.  Don’t automatically accept HMRC are correct if they say your penalty isn’t the type that can be suspended.  The FTT noted that this legislation (relating to suspended penalties) has a wide purpose of enabling taxpayers to produce tax returns which were free from careless errors.

As with all of our tax tips and web pages this information is necessarily summarised and of a general nature.  If you would like detailed specific advice please contact us.