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  • HMRC boss tells MPs ‘innocent errors’ are not penalised, amid Zahawi tax row

HMRC boss tells MPs ‘innocent errors’ are not penalised, amid Zahawi tax row

The head of HM Revenue and Customs has told MPs there are “no penalties for innocent errors” in relation to tax affairs, raising further questions about the circumstances that led to the Conservative party chair, Nadhim Zahawi, being fined by the tax office.

by | 26 Jan, 2023

HMRC’s chief executive, Jim Harra, said his department did not penalise taxpayers who were deemed to have taken “reasonable care”.

“There are no penalties for innocent errors in your tax affairs,” he told the public accounts committee on Thursday. “If you take reasonable care, but nevertheless make a mistake, whilst you will be liable for the tax, and for interest … you would not be liable for a penalty.

“But if your error was as a result of carelessness, then legislation says that a penalty could apply in those circumstances.”

The testimony adds to pressure on the former chancellor to explain what led to him receiving an HMRC penalty before his appointment as the Tory party chair on 25 October 2022. Zahawi is understood to have paid an estimated total of £5m, which included interest, about £3.7m in tax owed and a penalty of 30%, according to Guardian sources.

Zahawi said last week that the error was “careless and not deliberate”, but has not provided further details.

Read more at The Guardian

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