CH81161 - Types of inaccuracy: Examples of deliberate and concealed

This guidance applies to returns and documents with a filing date on or after 1 April 2009 where the return covers a tax period beginning on or after 1 April 2008 seeCH81011for full details.

Example 1

Paolo takes £50 a week from his takings as ‘pocket money’. This money goes unrecorded when he adds up his weekly takings and enters the total into his records. During a compliance check of his return Paolo produces false invoices which he has prepared to support the figure of takings in his records.

Preparation of the artificial invoices and giving them to us represents an attempt to conceal the deliberate inaccuracy.

Example 2

When completing one of his VAT returns, Michael decides to enter an inflated input tax figure on his return in order to reduce his declared net liability. He hopes that the false return will not be selected for checking. In order to make the inaccuracy more credible, Michael creates a false purchase invoice which he enters in his business records.

In this case Michael has taken active steps to conceal the inaccuracy through the creation of a false invoice specifically designed to mislead.

Example 3

Mary is a self-employed hairdresser. During a compliance check of her Self Assessment return, you discover interest from a bank account that she has not declared in her return. Mary produces a letter from her aunt to support her explanation that the source of the funds in the bank account was a gift from her aunt.

During the compliance check you establish that Mary had not received any money from her aunt. She had taken active steps to conceal the inaccuracy by creating an alternative explanation for the source of the funds in her undeclared account.