This week's opinion

Is it ever possible for a taxpayer to make an innocent error? Surely the answer must be yes. Indeed our tax system is so complex that it is a source of amazement that anybody can navigate it without making the occasional mistake. But does HMRC agree?

Recent examples in the courts suggest that it does not. In a VAT appeal heard by the First-tier Tribunal – Godolphin (TC6515)  – HMRC said: ‘In all circumstances there can be no reasonable excuse as a result of genuine mistakes.’ Thankfully the tribunal said that there was ‘no basis for that view.’

When the new penalties regime came in we welcomed the fact that there was a specific rule that there would be no sanction if the error was made ‘despite taking reasonable care’. In other words innocent errors would not be punished.

Anecdotal evidence from colleagues in firms large and small is that...