Relying on an accountant usually counts as reasonable care, so no careless inaccuracy penalty is due, if you chose an apparently competent adviser, gave them full and accurate facts, checked their work as far as you reasonably could and followed their advice. Simply leaving everything to the accountant does not count. Different, stricter rules apply where the error comes from tax avoidance arrangements that HMRC defeats.

Who is responsible when an accountant files the return?

You are. Paragraph 18 of Schedule 24 to the Finance Act 2007 makes the taxpayer liable for a careless inaccuracy in a document given to HMRC on their behalf, and it treats a failure by the agent to take reasonable care as a failure by the taxpayer. HMRC’s Compliance Handbook at CH84520 puts it plainly: it does not matter whether the careless inaccuracy was put in the document by you or by a third party.

The same paragraph contains the escape route. Under paragraph 18(3), you are not liable to a penalty for anything done or omitted by your agent if you satisfy HMRC that you took reasonable care to avoid the inaccuracy. So the question is never whether the accountant made the mistake. It is whether you, separately, behaved as a prudent and reasonable person would.

The burden is on you. CH84540 says the onus is on the person to satisfy HMRC that they took reasonable care, and that where an agent is acting HMRC expects evidence, including what passed between the taxpayer and the agent.

What does HMRC accept as reasonable care when using an adviser?

CH84540 sets out a four part benchmark. A person takes reasonable care where they:

  1. go to an apparently competent professional adviser;
  2. give the adviser a full and accurate set of facts;
  3. check the adviser’s work or advice to the best of their ability and competence; and
  4. adopt it.

Meeting all four means you have taken reasonable care to avoid inaccuracy on your own part and your agent’s. The general test of reasonable care, explained at CH81140, is the standard of a prudent and reasonable person in your position, taking account of your ability and circumstances. HMRC says it does not expect perfection.

HMRC’s own factsheet on inaccuracy penalties (CC/FS7a) lists asking HMRC or a tax adviser when you are unsure, and following the advice given, as one of the ways to show reasonable care.

What does checking the accountant’s work actually require?

Not a second opinion on technical points. CH84540 says an ordinary person cannot be expected to challenge specialist professional advice on a complex legal point, but ought to be able to recognise the complete absence of a major transaction. In practice that means reading the draft return before approving it and asking about anything that looks wrong or missing: a property sale that does not appear, turnover far below what went through the bank, a dividend you know you took.

The checking duty is scaled to the person. A company with a finance team is expected to spot more than a sole trader with no accounting background. For companies, CH84530 says the officers must set up systems and procedures to keep accurate records and make accurate returns, and must supervise and check the work of any in house tax staff.

When does relying on someone else fail?

HMRC’s guidance identifies several situations where reliance will not protect you:

  • Leaving it all to the agent. CH84540 says that saying and meaning “I leave it all to my agent” is hardly taking care, let alone reasonable care.
  • Choosing the wrong person. Asking a lay colleague or someone met socially is not reasonable care. You must choose an adviser who is trained and competent for the task in hand.
  • Incomplete information. No agent can produce correct returns from grossly deficient records or advise properly without all the facts. HMRC’s reasonable care guidance says it is your responsibility to give your adviser accurate and complete information.
  • Ignoring the advice. Taking advice and then not implementing it, or neglecting a vital step, is not reasonable care.
  • Signing what you were handed. Example 8 at CH81145 describes a subcontractor who answered an advert from a repayment agent, signed a completed return without asking about the figures, and was found at least careless.

What if the accountant was dishonest?

Your behaviour and the agent’s are judged separately. CH84520 says your behaviour would be deliberate if you were complicit with the agent, careless if you could have done more to stop the agent acting as they did, and not careless if you had no possible way of knowing about the dishonesty. Where HMRC suspects dishonest conduct by the agent, it has a separate regime aimed at the agent, covered in our page on HMRC powers over dishonest tax agents.

The agent is not normally penalised under Schedule 24 for the client’s inaccuracy. Paragraph 1A charges a third party who deliberately supplies false information or withholds information intending the return to be wrong, but CH84545 says it is extremely unlikely that a tax adviser would be liable to that penalty in the normal course of giving advice.

Are the rules different for tax avoidance schemes?

Yes. Paragraph 3A of Schedule 24, added by the Finance (No. 2) Act 2017, applies where an inaccuracy arises because a return was submitted on the basis that avoidance arrangements had an effect they did not have. The inaccuracy is presumed careless unless it was deliberate or you show you took reasonable care. HMRC’s guidance on reasonable care says this applies to returns for periods beginning on or after 6 April 2017 and ending after 15 November 2017, sent on or after 16 November 2017.

In deciding reasonable care, HMRC and the tribunal must ignore reliance on disqualified advice. Paragraph 3A(4) lists five categories. Advice is disqualified if it was:

  • given by an interested person, meaning someone who participated in the arrangements or was paid to facilitate your entry into them, such as the promoter;
  • given under arrangements between an interested person and the adviser;
  • given by someone without appropriate expertise;
  • given without taking account of your individual circumstances; or
  • addressed or given to someone other than you, such as a generic counsel’s opinion supplied with a scheme.

The first three categories do not apply if, when the return was filed, you had taken reasonable steps to find out and reasonably believed they did not apply. HMRC’s guidance says that using a tax adviser with appropriate expertise would normally be treated as reasonable care unless the advice is disqualified. For the wider avoidance picture see our pages on the general anti abuse rule and penalties for enablers of defeated tax avoidance.

Does the same test apply to late filing and time limits?

Similar wording appears elsewhere. For late filing penalties, paragraph 23(2)(b) of Schedule 55 to the Finance Act 2009 says that relying on another person is not a reasonable excuse unless you took reasonable care to avoid the failure. HMRC’s public guidance lists relying on someone else to send your return, who then did not, as something that may count as a reasonable excuse, so the outcome turns on what you did to make sure it happened. Our page on reasonable excuse covers this in detail.

Reasonable care also affects how far back HMRC can assess. Under section 36 of the Taxes Management Act 1970, HMRC has six years to assess income tax or capital gains tax lost through carelessness, and section 36(1B) treats a loss brought about by someone acting on your behalf as brought about by you. Showing that neither you nor your agent was careless can therefore limit the years open to assessment as well as the penalty. See how far back HMRC can go.

How might this work in practice?

Illustration only. Priya runs a consultancy and uses a chartered accountant. She sends a full set of bank statements and invoices, answers the accountant’s questionnaire, and reads the draft return. The accountant wrongly claims a disallowable expense, a technical point Priya could not have spotted. Priya has met the CH84540 benchmark and should not face a penalty, although the tax itself is still payable.

Contrast Tom, who forgets to tell his accountant about a rental flat he started letting in the year and signs the return without reading it. The missing rental income is a major item he would have noticed. HMRC is likely to treat the inaccuracy as careless, with a penalty of up to 30 percent of the potential lost revenue under the ranges in CC/FS7a, reduced for disclosure.

What mistakes do taxpayers make?

  • Assuming the penalty falls on the accountant. It falls on the taxpayer unless they prove reasonable care.
  • Keeping no record of the instructions and information given to the adviser, which is the evidence CH84540 says HMRC will look for.
  • Approving returns without reading them.
  • Discovering an error later and doing nothing. Under paragraph 3(2) of Schedule 24, an inaccuracy that was not careless when made is treated as careless if you later discover it and do not take reasonable steps to tell HMRC.
  • Relying on a scheme promoter’s opinion to show reasonable care in an avoidance case, when paragraph 3A treats that advice as disqualified.

For the penalty ranges and how disclosure reduces them, see HMRC penalties for tax return errors.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.