At a hearing before the House of Lords Finance Bill Sub-Committee, Adam Craggs, head of tax investigations at Reynolds Porter Chamberlain LLP and Antonia Stokes, senior manager at the Low Incomes Tax Reform Group (LITRG) criticised HMRC plans to force taxpayers to correct errors in their tax affairs, with risk of errors being labelled as ‘deliberate’ if they fail to act.

Under draft legislation published in July, taxpayers who become aware of an inaccuracy in a ‘return or other document’ submitted to HMRC would be required to take ‘reasonable steps’ to correct it or notify the tax authority.

The proposals would give HMRC new powers to issue a customer correction notice (CCN) requiring taxpayers to either correct an error or explain why no correction is necessary.