Penalties/ Error or mistake

Penalties/ Error or mistake

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My client received a £100 penalty re late submission of a personal tax return.

The return was for 1999/00 and showed tax due of over £100.

An error or omission claim was made March 2002 and accepted. The revised position is that a tax refund is due.

The Inland are saying there is no relief under S93(7) as the error or mistake claim is not treated as amending the original tax return.

I beleive the Inland Revenue are correct but this is a little harsh.

Am I correct that the penalty is still due ?

David Shepherd

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By AnonymousUser
12th Jun 2002 20:59

Yes they are perfectly correct but only so far
The error or mistake relief under section 33 TMA does not amend the return.

However, section 93(7) gives relief if the taxpayer sproves that a liability to tax shown in the return "would not have exceeded". That does not say liability to tax "did not exceed". I think, therefore, that there is an argument that the error or mistake relief not amending the return is a red herring. There is also the possibility that section 33, which talks about giving "such relief in respect of the error", means that that could be applied to a penalty because it does not talk about a relief from tax.

The problem is, as I have always found in the £100 arguments that costs outweigh the penalty and the Revenue are the winners.

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