What is Carelessness?
The words “careless” and “negligence” will trigger different associations in the minds of people reading this. But nobody – in their right minds – will say that carelessness and negligence are the same things.
But HMRC argue that carelessness and negligence are the same thing, Here’s what they say, ‘The law defines ‘careless’ as a failure to take reasonable care. Failure to take reasonable care can be likened to the longstanding concept in general law of “negligence”.’
So when HMRC talk about you being careless, what they are actually talking about is negligence.
Why is this so important?
Cash and power: by merging the definitions HMRC can slap the taxpayer with a hefty penalty of up to 30% – awwwch. And not only that, they can make discovery assessments which will allow them to look into earlier years.
In Taxation tax barrister Keith Gordon says, “…HMRC often accuses taxpayers of carelessness in any circumstances where they want to justify a discovery assessment, irrespective of the actual facts of the case….”[divider] Some information for this post was taken from Everything you wanted to know about a tax investigation… and the quotes have been taken from Taxation magazine.