CH81161 - Penalties for Inaccuracies: Types of inaccuracy: Examples of deliberate and concealed
You must check the date from which these rules apply for the tax or duty you aredealing with. 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, the money was undeclared income
from the business. She had taken active steps to conceal the
inaccuracy by creating an alternative explanation for the source of
the funds in her undeclared account.
Example 4
Nancy submits a Notice of Intention (NOI) form to notify HMRC of
her intention to claim drawback on 200 bottles of wine being
exported to France. However, only 100 bottles are actually sent to
France, the other 100 are delivered to a UK cash and carry. When
Nancy submits the drawback claim, she attaches a false Simplified
Accompanying Document (SAAD) which states that 200 bottles were
delivered to France.
Nancy has taken active steps to conceal the inaccuracy on
the claim by submitting the false SAAD.
Example 5
Peter is the personal representative of his late father’s
estate. Six years before his death, Peter’s father gave him a
house. Because his father died within seven years of the gift,
Peter should declare it in the IHT account as it affects the amount
of IHT payable. Peter does not include the gift and, during an
enquiry into the account, he produces a Deed of Gift which he has
altered to suggest that it was made more than seven years before
his father died.
Peter has taken active steps to conceal the deliberate
inaccuracy by falsifying a document to support the omission of an
asset from an IHT account.
