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Dear Tutor, i have another question which needs your help.
Sarah received gross NS&I investment account interest of £ 5300 in the tax 2015/16 which she deliberately omitted from her self-assessment tax return for that tax year. she didn’t attempt to conceal the omission. HMRC discovered the error from records collection from NS&I and Sarah then made a prompted disclosure of the error. the income tax payable on the interest was 2120.
what is the minimum penalty that HMRC may impose on Sarah in respect of this error?
the answer is 742, my qestion is how to make proper percentage (between 20% to 70%) about specific incorrect tax payment, for example Sarah is being determined by 35%. based on note said that there will be a higher penalty up to 70% of the understated tax if error is deliberate.
many thanksSorry cannot help you with this – where did you get the question from – as the only questions I have seen in this area ask for the MAXIMUM penalty (here 70% in the circumstances you describe) not the minimum!!
thank you for your response, this question came from BBP practice and kit December 2016 and March 2017 version, they use 35% , i think it is 20%, because (1) 20%-70% for understated tax deliberately; 30%-100% for understated tax deliberately and trying to conseal. (2) the question was asking the minimum penalty. how it can be 35% and how it is calculated?
i don’t know if i express clearly, please help me.
many thanksHi jingdongyu
Im just studying for F6 and came across same question. This a very late reply but for the benfefuts of upcoming students the answer lies in BPP study Text 2019 on page 253 where they give penalty rate for “Deliberate not concealed” and here in the question the HMRC is prompting for disclosure from Sarah and the rate for “Deliberate not concealed and “Prompted disclosure is 35%. Hence its a direct rate.
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