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It would seem from page 37 of the case in the link below that in alleging deliberate failure HMRC are effectively alleging fraud, which they should make expressly clear to the taxpayer.
http://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j10051/TC0...
If an agent prepared and/or advised on the (alleged) incorrect return then I cannot see how that is “careless” (let alone “deliberate”) and there seems to be support for that view in the links below:
https://www.taxation.co.uk/Articles/2014/11/18/332324/simple-mistake
https://www.taxation.co.uk/Articles/2014/09/30/331501/soggy-middle-ground
http://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j10221/TC0...
Unless perhaps the taxpayer was rubbish in providing his agent the information in the 1st place (i.e. rubbish in, rubbish out). See:
http://www.bailii.org/uk/cases/UKFTT/TC/2017/TC06177.html
A recent summary of “deliberate” cases is in the link below and note the burden of proof is on HMRC and also note the following:
“125. We do not accept HMRC’s submission that a failure to check without more amounts to deliberate behaviour, though it may well indicate careless behaviour; that is a failure to take reasonable care to avoid inaccuracy.”
http://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j10060/TC0...
Furthermore, the standard of proof for fraud allegations is quite high and the allegation must be made fairly per the case in the link below:
http://financeandtax.decisions.tribunals.gov.uk//judgmentfiles/j10855/TC...
I note Clynes was approved/followed in the case below re deliberate misconduct:
http://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j11076/TC0...
But this is possibly blunted by the Mabes case (so that the mistake is not even careless) where there is an accountant acting per the case below:
http://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j11077/TC0...
How can you have a "deliberate mistake". A mistake is unintentional.
Eh? Of course you can have a deliberate mistake. Wearing flared trousers and a medallion would be a mistake, whether you meant to or not. A mistake is an action that is misguided or wrong, but not necessarily unintentional.
I'll have you know there is nothing mistakable about wearing flares (that's what we call em). The medallion, hmm debateable, although if you were a gold medalist, wearing it would definitely be deliberate.
Our maths teacher used to say "that was a deliberate mistake" when he put something wrong on the blackboard.
So it is the intention of the mistake which could make it a deliberate action. If you had to pay HMRC £800 and only paid £300. Would that be an unintentional or intentional mistake, carelessness or a deliberate attempt to defraud HMRC out of £500?
Here's the difference in a nutshell. HMRC think everything is deliberate and will try and proceed on that basis to maximise yield, whereas the vast majority of cases are just careless or cases where the tax law is too complex and clients just didn't even think that they were liable to any tax.
This is a real concern for many advisors.
One additional factor is that, having determined that the taxpayer made a 'deliberate' error, HMRC can publish his/her details in their quarterly report, subject to the £25,000 threshold. This puts the taxpayer's behaviour right into the public arena.
But not if they come clean as follows per the link below:
"However, their information won’t be published if the person earns the maximum reduction of the penalties by fully disclosing details of the defaults."
https://www.gov.uk/government/publications/publishing-details-of-deliber...