Mark McLaughlin looks at whether an innocent misunderstanding of advice given by HMRC can represent a reasonable excuse for penalty purposes.
Tax practitioners of a certain vintage (including me, unfortunately!) will remember the days when HMRC mainly disseminated information to taxpayers through published material such as press releases, leaflets and booklets. It was also possible to pick up the telephone and call the local tax office for advice (I’ll pause there to reflect nostalgically about how much easier tax seemed back in the ‘good old days’!).
With the passage of time, technological advancements have resulted in the vast majority of HMRC information and guidance being published online, via the Gov.uk website. Sadly, local tax offices have disappeared and have been replaced by helplines and call centres (www.gov.uk/contact-hmrc). However, taxpayers can still ring HMRC for help and advice and can potentially still write to HMRC with queries. Other facilities include a digital assistant to assist with certain tax matters (e.g. tax codes, or claiming a tax refund), with the option of transferring the query to an HMRC officer, if preferred.
In addition, HMRC operates community forums, to help users find answers to their questions about tax and benefits (https://community.hmrc.gov.uk/). The customer forums are aimed at taxpayers, while the agent forums are for tax agents who are represented by a professional body to enable the reporting of issues about HMRC systems that are affecting taxpayers and their clients.
As with all types of information and advice provided by HMRC the question arises: to what extent can taxpayers rely on information or advice given by HMRC officers (in this instance, on the customer forums), which turn out to be incorrect or misleading?
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