CH84520 – Other penalty issues: Agent acting: Introduction to agent acting

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.

We may charge a penalty where

• a person gives us a return or other document, see CH81050, that contains a careless or deliberate inaccuracy, or
• we send a person an assessment that they know, or should have known, understates their tax liability and they fail to take reasonable steps to tell us that it is an under- assessment, or
• a person

This failure effectively transforms the no-fault inaccuracy into a careless one.

In each case, the law refers to the action or inaction of the person, alone.

Agents

Where an agent is acting for the person the scope of those provisions is widened. A person may be charged a penalty where

• the inaccurate return or document was given to us by someone acting on the person’s behalf, or
• a careless inaccuracy is due to the failure to take reasonable care of someone acting on the person’s behalf, or
• someone acting on the person’s behalf knew or should have known about an under- assessment and failed to take reasonable steps to tell us
• someone acting on the person’s behalf discovers an inaccuracy and does not take reasonable steps to tell us.

We can only charge a person a penalty for careless, and not deliberate, inaccuracy by an agent. But if the person satisfies us that they themselves took reasonable care to avoid the inaccuracy or failure, there will not be a penalty, see CH84540.

For further guidance on the relationship between a person and an agent, see CH84530.