TaxPersonal TaxPwC welcomes new penalties for incorrect returns

PwC welcomes new penalties for incorrect returns

Budget announced changes to the penalties regime for incorrect tax returns

PricewaterhouseCoopers has welcome
the changes to the penalties regime for incorrect tax returns for all taxpayers
announced in the Budget.

The rules will take effect after 31 March 2008 for returns filed after 31
March 2009.

Stephen
Camm, tax investigations partner
at PwC, said: ‘This move is welcomed. The
new ‘stepping’ of penalties will hopefully set down a common sense framework
across all taxes for incorrect tax returns.

The changes to the regime now mean that:

• A simple mistake should not attract a penalty;

• Penalty rates will be set and there will be a set reduction tariff for
certain actions rather than being left up to the inspector’s discretion during
negotiation;

• A suspended penalty will be given for ‘failure to take reasonable care’ in
some circumstances, typically when a business is culpable in some way but then
promises to correct an underlying systems problem; and

• Unprompted disclosures will attract reduced penalties.

Further reading:

Budget07: Income tax thresholds amended

Budget 2007: Is it smoke and mirrors?

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