HMRC have updated their Compliance Handbook guidance in relation to the meaning of “deliberate behaviour” when considering whether the 20-year time limit can apply for raising assessments outside the normal time limits.
In summary, HMRC state that “a deliberate inaccuracy in a document occurs when a person (or another person acting on behalf of that person) knowingly gives HMRC an inaccurate document”. The following examples are then given of “actions that might lead to a deliberate inaccuracy in a document”:
- knowingly failing to record all sales, especially where there is a pattern to the under-recording, such as omitting all transactions with a particular customer or at a particular time of the week, month or year
- describing transactions inaccurately or in a way likely to mislead
- giving a VAT return to HMRC that includes a figure of net VAT due that is too low because the person does not have the cash at that time to pay the full amount, and later telling HMRC the true figure when he has the funds to pay
- similarly declaring less tax due for aggregates levy, climate change levy, landfill tax or excise duty because the person does not have the funds at that time to pay the full amount
- claiming a deduction for personal expenses of such a size or frequency that the inaccuracy must have been known
- knowingly making an understatement of consideration on SDLT1 compared to Land Registry form (TR1) to reduce the SDLT payable
- knowingly making a duplicated claim for repayment of SDRT
- knowingly claiming a higher (than is just and reasonable) proportion of shared costs in a taxable field for petroleum revenue tax
- knowingly omitting or understating the value of a property for inheritance tax.
The guidance also reminds readers of HMRC’s criminal investigation policy.
Related content from Claritax Books
Discovery Assessments, by tax barrister Keith Gordon, is a detailed, clearly written guide to the law and practice in this area. Based on the author’s personal involvement in many leading cases, the book contains much practical advice explaining when and how such assessments may be challenged.