DELIBERATE UNDERSTATEMENT
Deliberate Understatement
Deliberate understatement on a tax return is a serious offence, and is considered to be a wilful act of fraud. At best, the penalty can be up to 70% of the extra taxation due to HMRC, and at worst criminal fraud prosecutions could be levied against the individual or business, leading to the confiscation of personal possessions under the Part 6 of the Proceeds of Crime Act 2002.
An example of deliberate understatement could be failing to pay the tax due on the funds, or paying wages to an employee without factoring PAYE costs into your books. Expenses could also fall into this camp, such as attempting to write off personal costs as tax-deductible business expenses.
Such errors will not be considered innocent mistakes or misrepresentations that could escape financial repercussions. There is nothing to gain by attempting to understate your taxation that is due – HMRC will discover the discrepancy, and the charges levied in the form of fines will greatly outnumber any financial gain. If you are in any doubt at all as to what needs to be declared upon your tax return, call upon the services of a professional tax accountant.
It is also essential that, if this understatement is captured, no attempt is made to deny or conceal the action. That is the final scale of wrongdoing that leads to HMRC financial penalties, and the most serious offense of all.
Mistake or Misrepresentation
While tax law is extremely grounded in accuracy and factual data, mistakes can happen. If you can prove to HMRC that any mistake or misrepresentation in your tax
Failure to Take Reasonable Care
If HMRC deem an individual or business to have failed to take reasonable care in completing their tax return, it will be declared a moderate offence.
Deliberate Understatement
Deliberate understatement on a tax return is a serious offense and is considered to be a wilful act of fraud. At best, the penalty can be up to 70% of the extra tax due
Deliberate Concealment
Deliberate concealment is an attempt to tricking HMRC, and as a result, the consequences are extremely severe and the penalty can be as high as 300%.