CH81120 - Penalties for Inaccuracies: Types of inaccuracy: What is reasonable care
You must check the date from which these rules apply for
the tax or duty you aredealing with. SeeCH81011for full details.
An inaccuracy that is careless incurs a penalty. The law
defines ‘careless’ as a failure to take reasonable
care, see
CH81140.
Every person must take reasonable care, but
‘reasonable care’ cannot be identified without
consideration of the particular person’s abilities and
circumstances. HMRC recognises the wide range of abilities and
circumstances of those persons completing returns or claims.
So whilst each person has a responsibility to take
reasonable care, what is necessary for each person to discharge
that responsibility has to be viewed in the light of that
person’s abilities and circumstances.
For example, we do not expect the same level of knowledge or
expertise from a self-employed un-represented individual as we do
from a large multinational company. We would expect a higher degree
of care to be taken over large and complex matters than simple
straightforward ones.
HMRC expects each person to make and preserve sufficient
records for them to make a correct and complete return.
A person with simple, straightforward tax affairs needs only
a simple regime provided they follow it carefully. But a person
with larger and more complex tax affairs will need to put in place
more sophisticated systems and follow them equally carefully.
In HMRC’s view it is reasonable to expect a person who
encounters a transaction or other event with which they are not
familiar to take care to find out about the correct tax treatment
or to seek appropriate advice.
If after that the person is still unsure they should draw
attention to the entry and the uncertainty when they send the
return or document to us. In these circumstances the person will
have taken reasonable care to draw our attention to the point and
if they are wrong they will not have been carelessly so.
