HMRC issued 18,641 penalties to taxpayers over careless mistakes made on tax returns last year, according to specialists in tax and accountancy software at Thomson Reuters. 

In addition to penalties issued for careless mistakes, HMRC also issued 10,703 fines to taxpayers for more serious ‘deliberate errors’ and levied 1,025 fines for the most serious offence of making deliberate errors and attempting to conceal them from HMRC. 

The value of penalties issued by HMRC relating to mistakes made on tax returns can range from between 0-30% of the unpaid tax as a fine for failing to take ‘reasonable care’. For deliberate errors, fines range between 20-70% of the tax owed and if the error was deliberate and concealed, the penalty will be 30-100%. 

HMRC will penalise taxpayers for failing to take ‘reasonable care’ if they make unintentional errors, such as miscalculating tax owed. Fines for ‘deliberate’ errors are levied if HMRC suspects the taxpayer is trying to pay less tax than they owe.  

Thomson Reuters general manager for tax & accounting professionals in the UK, Simon Brookings, said: “The fact that tens of thousands of penalties are being levied demonstrates the need for greater adoption of technology to ensure tax returns are accurate.” 

Thomson Reuters says individuals who file their own tax returns without seeking advice from an accountant are putting themselves at a higher risk of making mistakes. Technology solutions, such as Digital Personal Tax enable accountants to submit tax returns swiftly and efficiently. 

Brookings added: “HMRC may show leniency the first time someone makes a mistake. However, repeat offences can act as a ‘red flag’ and suggest taxpayers are trying to pull the wool over HMRC’s eyes. 

“Accountants can quickly identify and rectify errors such as miscalculations that have been overlooked on tax returns and can use the technology at their disposal to help clients navigate some of the pitfalls associated with the tax process”.