Could HMRC care less?

KEY POINTS

• The taxpayer used HMRC’s software to file his return.
• A fault in the software led to a tax underpayment.
• HMRC issued a penalty for carelessness.
• Penalty cancelled by the tribunal.

I am often asked by advisers about HMRC’s understanding of the terms “negligence” or its post-2010 equivalent “carelessness”.

In my experience (one shared by many other advisers) 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. A case I recently took to the First-tier Tribunal illustrates the point perfectly.

The case also demonstrates how HMRC aggression can also be totally counterproductive.

The facts

In January 2010 the taxpayer completed his 2009 tax return online using HMRC’s software on their website. The...