Get tax return right 'or face hefty penalty'

Scots filing tax returns this month have been warned that any mistakes could result in a heavy fine as HM Revenue & Customs (HMRC) seeks to boost its coffers.

The UK government's tax office has adopted an increasingly unforgiving attitude to incorrect tax returns in recent months, punishing even the most innocuous errors, according to an Edinburgh tax expert.

The zero tolerance approach has emerged since the introduction in April 2009 of a more draconian penalty system for inaccurate tax returns, according to Neil Whyte, partner at PKF accountants and business advisers in Edinburgh.

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Under the new regime, HMRC is penalising people if they believe errors are due to carelessness or a result of the taxpayer failing to take reasonable care in filing the return.

Those filing inaccurate returns because of what HMRC con- siders carelessness face fines of up to 30 per cent of any tax due.

The fine reaches 70 per cent if the tax office thinks the error is deliberate.

Whyte said: "If any amendment on a return generates an increased liability, perhaps because something was originally put in the wrong box by mistake, HMRC is applying penalties on every occasion and taxpayers have to justify why they shouldn't be fined."

And Whyte said it has become obvious in recent months that HMRC is not prepared to negotiate in such cases. "It promised a light touch approach but as soon as it finds a liability has to be increased, there is a penalty," he said.

"With the tax return season now on us, people should take extra care to look over their tax return and check everything or get help."

The deadline for those needing to file self-assessment returns is 31 January. HMRC has warned that late returns will risk a 100 penalty.