Challenging tax penalties: Agent blame

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In the second in a series of articles on challenging tax penalties, George Rowell explains the key principles that apply when the taxpayer blames their agent for the mistake in question.

Taxpayers often claim that they themselves acted reasonably because the inaccuracy in their return, late filing, late payment, etc., was the fault of their accountant, solicitor or other professional agent.

How likely is such an excuse to succeed?

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19th Jun 2013 22:27

Great summary

I seem to recall HMRC providing further guidance along the following lines (which I then referenced in various talks over the years). Reasonable care defence will not be available if:

1) taxpayer does everything at the last minute as they are evidently not taking reasonable care and cannot blame their agent for errors that arise.

2) taxpayer simply chooses the cheapest inexperienced accountant they can find and that accountant makes mistakes due to inexperience etc, 

3) taxpayer doesn't chase up their accountant if accounts/tax returns take months to get turned around after all data submitted.

4) taxpayer's books and records are a mess even if accountant is able to sort things out

But, maybe things have moved on.




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By appacc
21st Jun 2013 12:52

Things sometimes go wrong... the best of practices. We all get the odd case where something is overlooked and the client gets a penalty.

I believe that each agent should have one or two "get out of jail free" cards for cases where there has just been an innocent hitch.

After all, HMRC sometimes make a mistake or two. Today I received 4 paper P35's in the post for the same employer even though we have filed electronically in good time. No explanation. Someone has got it wrong but there are no reverse penalties.

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