NADHIM Zahawi has come under more pressure over his tax affairs after the head of HMRC told MPs there were “no penalties for innocent errors.”
The Tory party chair is currently under investigation by Rishi Sunak’s ethics advisor over claims he may have broken the ministerial code by settling a seven-figure tax bill while he was chancellor.
The estimated £4.8 million agreement included a substantial penalty.
READ MORE: Pressure on Zahawi over million pound tax bill and penalty from HMRC
Mr Zahawi has insisted he is “confident” he has “acted properly throughout” and that there had been a “careless and not deliberate” error.
Appearing before the Public Accounts Committee - and making clear he was not talking about any individual - HMRC chief executive Jim Harra told MPs: “Carelessness is a concept in tax law.
"It can be relevant to how many back years that we can assess, can be relevant to whether someone is liable to a penalty and if so, what penalty they will be liable to for an error in their tax affairs.
“There are no penalties for innocent errors in your tax affairs.
“So if you take reasonable care, but nevertheless make a mistake, whilst you will be liable for the tax and for interest if it’s paid late, you would not be liable for a penalty.
“But if your error was as a result of carelessness, then legislation says that a penalty could apply in those circumstances.”
READ MORE: Sunak denies being weak for not sacking Zahawi
He was asked what the HMRC would do if a prominent politician make a claim about their tax affairs that HMRC knows is “categorically false”.
Mr Harra said the body had a duty of confidentiality.
“As a general rule, our duty of confidentiality would mean that if a taxpayer made a public statement about their affairs which we felt we did not agree with, that would not be a matter that we would correct.
“But again, we would look at things on a case-by-case basis and decide whether in that particular case, the issue was such that it was within our functions to disclose information, but as a general rule our default is that we don’t disclose, and it can be a source of frustration for HMRC because people will brief the press or perhaps brief MPs about their tax affairs.
“We will sometimes feel it’s not the full story, but we have to deal with it on the basis of their disclosure because we’re not in a position to disclose further information.”
READ MORE: OPINION: A job too big for him and a past he cannot leave behind
Mr Zahawi is at Chequers with the Prime Minister and colleagues as part of a cabinet away day.
On Wednesday night, he took to Twitter to wish "a very happy Burns Night to all who are celebrating- especially to those in Scotland."
A number of people took to social media to point out that Robert Burns was a taxman.
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