IHTM36314 - Innocent error: misinformed by a third party

The taxpayer has a personal duty to deliver a correct account.

Understandably some taxpayers will find that they need professional advice and it would be negligent for them to deliver an account without resolving a point on which they were in real doubt. The extent to which they are entitled to rely on advice will vary according to circumstances.

For example, the taxpayer might know of the existence of a bank account, but not the amount in it. Enquiries are sent to the bank concerned but the agent advises the taxpayer that there is no need to wait for the information - the account can be sent in with no reference to the bank account, with the details being sent in later. The taxpayer cannot rely on this advice, because she or he has declared that the account is complete, when clearly they knew it was not.

On the other hand a solicitor might give advice on the legal consequences of various deeds and documentation such that property the executors thought belonged to the deceased was actually owned by another person. As a result that property was not included in the account. Subsequently it comes to light that the property was rightly owned by the deceased. The taxpayers were entitled to rely on the solicitor’s professional advice and were not negligent on omitting the property originally.

Very broadly if a professional agent gives specialist legal or technical advice which you would not expect to be within the knowledge of a lay person then to accept and act upon that advice, even if it is wrong or negligently given, would be considered an innocent error on the part of the taxpayer. If however a professional agent gives advice which any reasonable and prudent person ought to realise is incorrect, then we consider it is negligent to act upon and rely on that advice.