HMRC compliance checks are the standard system used by HMRC to inspect taxpayer records. Compliance checks into returns or other documents are conducted by HMRC to ensure that taxpayers are paying the right amount of tax. The compliance checks apply to both individual taxpayers and businesses.

The factsheet titled Compliance checks: suspending penalties for careless inaccuracies in returns or documents CC/FS10 includes information on when HMRC can suspend a penalty for careless inaccuracies.

HMRC will only suspend penalties for careless inaccuracies in returns or documents if they are able to set at least one suspension condition that will help the taxpayer avoid penalties for similar inaccuracies in the future.

Each condition must be 'SMART'. SMART means:

• Specific – it must be directly related to the cause of the inaccuracy.
• Measurable – the taxpayer needs to be able to show HMRC whether they have met the condition.
• Achievable – the taxpayer needs to show HMRC that they are able to meet the condition.
• Realistic – HMRC can realistically expect that the taxpayer will meet the condition.
• Time bound – the taxpayer must meet the condition by the end of the suspension period.

The factsheet also explains that HMRC cannot suspend penalties for deliberate or deliberate and concealed inaccuracies.

Source: New feed