16 Serious misdeclaration or neglect resulting in understatements or overclaims.U.K.
(1)Section 14 of the M1Finance Act 1985 (serious misdeclaration or neglect resulting in understatements or overclaims) shall be amended as follows.
(2)For subsections (2) and (3) there shall be substituted—
“(2)The circumstances referred to in subsection (1) above are that the tax for the period concerned which would have been lost if the inaccuracy had not been discovered—
(a)equals or exceeds 30 per cent. of the true amount of tax for that period, or
(b)equals or exceeds whichever is the greater of £10,000 and 5 per cent. of the true amount of tax for that period.”
(3)In subsection (4) for the words “The references in subsections (1) to (3) above” there shall be substituted the words “Any reference in this section”.
(4)In subsection (5) for the words “subsections (2)(a) and (3) above” there shall be substituted the words “this section”.
(5)After that subsection there shall be inserted—
“(5A)Where—
(a)a return for any prescribed accounting period overstates or understates to any extent a person’s liability to tax or his entitlement to a payment under section 14(5) of the principal Act, and
(b)that return is corrected, in such circumstances and in accordance with such conditions as may be prescribed, by a return for a later such period which understates or overstates, to the corresponding extent, that liability or entitlement,
it shall be assumed for the purposes of subsection (5) above that the statement made by each of those returns is a correct statement for the accounting period to which it relates.
(5B)This section shall have effect in relation to a body which is registered and to which section 20 of the principal Act applies as if—
(a)any reference to a payment under section 14(5) of that Act included a reference to a refund under the said section 20, and
(b)any reference to credit for input tax included a reference to tax chargeable on supplies or importations which were not for the purposes of any business carried on by the body.”
Marginal Citations