EM5183 - Penalties: Culpability - Defences: Provision of Information and Documents during an Enquiry

Provision of information and documents

The co-operation you receive during your enquiry is taken into account in computing the penalty charged for any inaccuracy or failure. It is not relevant whether the original inaccuracy or failure was negligent or fraudulent, careless or deliberate.

If the taxpayer fails to co-operate and you need to use formal information powers, there are separate penalties for not complying with an information notice or for providing inaccurate information.

Section 98(2) TMA 1970

If a person fraudulently or negligently provided incorrect information in response to a TMA/S19 or FA98/SCH18/PARA27 notice, TMA/S98(2) may apply.

Provision of incomplete information in response to enquiries

This may be done ‘carelessly’ in which case there might be negligence, or it might be done ‘carefully’, i.e. deliberately, in which case something more serious might be happening. Much depends on whether the failing is exceptional or typical behaviour and the case officer will have to take a view on this.

Incorrect information provided in response to an enquiry

If that information is negligently incorrect, TAM70/S98(2) may apply. If the information is ambiguous and the inspector is misled by it into believing the return is correct then the company has a duty to correct his. Allowing an incorrect return to stand is culpable. If the information is unambiguous then the reply may amount to a ‘lie’ which takes it into potential fraud territory.

Schedule 36 FA 2008

Guidance about penalties for failure to comply with an FA08/SCH36 information notice is at CH26000+.