Lack of consideration

Conditions to suspend a penalty for careless inaccuracy

The taxpayer submitted his 2013-14 tax return using the information on his form P60. However this did not include income from his previous employment.

The error came to light after HMRC opened an enquiry into the return. The officer amended the form and imposed a penalty for carelessness. He said the penalty could not be suspended because it was ‘not likely’ that the taxpayer would repeat the error in future returns.

The taxpayer appealed.

The First-tier Tribunal accepted that it was a genuine and honest mistake but that it was a careless one. It ‘should have been obvious’ to the taxpayer that the P60 did not include all his earnings for the year.

The judge said further that HMRC had applied the penalty proportionately.

However the decision not to suspend it was ‘flawed’. The officer had not said on what...