CH81170 – Types of inaccuracy: Penalty for under-assessment by HMRC

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.

A penalty may be appropriate where tax has been under-assessed because of the person’s failure to send us a return, see CH81090. You must consider

• whether the person knew or should have known about the under-assessment, and
• what steps (if any) it would have been reasonable for them to take to tell you about the under-assessment.

The person must tell you if he thinks the assessment is insufficient. Reasonable steps to tell you about the under-assessment would include

• phoning HMRC to discuss it
• writing, e-mailing or faxing an HMRC office to tell us the assessment is insufficient
• consulting an agent to enable them to inform HMRC.

A person who sends their return in on time will not receive an assessment of estimated liability because they will have self-assessed and so this penalty will not apply.