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Fraud or Neglect

Will Heard reviews when the distinction between fraud and neglect is important in Inland Revenue investigations
A As long ago as Finance Act 1989 the maximum financial penalty for fraud was reduced from twice the evaded tax to an amount equal to the evaded tax. Since the maximum penalty for neglect was also an amount equal to the evaded tax this amendment appeared to remove the need for both the inspector and adviser to distinguish between the two concepts when dealing with a tax investigation.
This move gave legitimacy to several conventions operated by the Revenue in practice. Firstly the maximum penalty that was negotiated in blatant fraud cases rarely exceeded 100% of the evaded tax. Secondly there was little distinction in the Revenue's mind between a...

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