HMRC Chief Says There Aren't Penalties 'For Innocent Errors' After Zahawi Was Penalised Over Taxes

Jim Harra, HMRC chief, commented on tax affairs without directly addressing Nadhim Zahawi's issues

HMRC chief Jim Harra told MPs that there are “no penalties for innocent errors”, following the ongoing furore around Nadhim Zahawi’s taxes.

The chief executive of HM Revenue and Customs (HMRC) told MPs in the public accounts committee that he was not speaking about any individuals in particular.

Although Harra’s comment was not directly related to anyone, it comes after it was revealed that Zahawi, the Tory Party chair and former chancellor, paid a penalty to HMRC before taking up his current government role.

The Guardian and the BBC reported that Zahawi paid an outstanding tax bill along with a 30% penalty – adding up to around £4.8 million in total.

Zahawi said that HMRC has agreed that this was just a “careless and not deliberate” mistake.

PM Rishi Sunak has ordered an investigation by his independent ethics adviser into the matter but has so far ignored calls for him to sack Zahawi, who has also refused to resign over the matter.

Harra told MPs that his HMRC officials would help “in any way we possibly can” with the investigation into Zahawi’s finances.

But he said: “There are no penalties for innocent errors in your tax affairs.

“So if you take reasonable care, but nevertheless make a mistake, while 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.”

Amid laughter from MPs he added that “innocent” is not used in the official legislation.

“If you have been careless in your tax affairs and as a result of that carelessness have made a mistake, then you could be be liable to penalty.” he explained.

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