HMRC increase number of inaccuracy penalties for errors in returns and documents across all the taxes

In the year ending March 2022, HMRC issued 89,000 inaccuracy penalties to businesses and individuals, an increase of 80% from the previous year.  Of the total, 80% were suspended, a significant increase from the previous two years when only 60% and 40% respectively were suspended.  Only errors caused by careless rather than deliberate behaviour can be suspended.

These figures may be skewed by the impact of the Covid-19 pandemic.  To reduce the risk of penalties, notify HMRC of the error immediately so that it becomes unprompted rather than prompted. 

Type of behaviour	Unprompted disclosure	Prompted disclosure
Reasonable care	No penalty	No penalty
Careless	0% to 30%	15% to 30%
Deliberate	20% to 70%	35% to 70%
Deliberate and concealed	30% to 100%	50% to 100%

For more information, please contact our VAT team.