HMRC Reckless Untrue Tax Statements Offence: Respond by 16 August 2026

HM Revenue & Customs opened an eight-week consultation on 23 June 2026 proposing a new criminal offence for making reckless untrue statements or declarations in direct tax. The consultation closes at 11:59pm on 16 August 2026. The stated aim is to align income tax, corporation tax, and capital gains tax enforcement with offences that already exist for VAT and customs under the Value Added Tax Act 1994 and the Customs and Excise Management Act 1979.

For directors, sole traders, and advisers filing Self Assessment or corporation tax returns, the practical message is not panic — accidental mistakes remain a civil matter — but documentation discipline. HMRC and professional commentary from KPMG and Ross Martin emphasise that recklessness is a higher bar than carelessness: the person must be aware of a risk that a statement is untrue and unreasonably proceed anyway.

Today, criminal prosecution for direct tax typically requires proof of dishonesty (fraudulent evasion). For VAT and customs, prosecutors can already pursue knowingly or recklessly making untrue statements without proving dishonesty. HMRC argues this gap produces inconsistent outcomes when juries are sure of reckless falsehoods but not of dishonesty.

The consultation proposes mirroring the indirect-tax recklessness offence for direct taxes. Proposed sanctions under discussion include a custodial sentence of up to two years and/or an unlimited fine on indictment — closer to the Customs and Excise model than the longer maximum available under some VAT criminal provisions.

HMRC states the offence should not capture accidental errors, misunderstandings, or failures to take reasonable care. Those continue under civil penalty regimes. The policy target is serious non-compliance where awareness of falsity risk is present.

Tax professionals, corporate tax teams, trustees, and business owners who sign returns or make formal declarations to HMRC should review the consultation questions. Representative bodies and advisers can still submit views to [email protected] before the deadline.

Even before any law changes, the consultation signals HMRC’s enforcement direction: clearer records of how uncertain positions were reached, what advice was taken, and why a figure or claim was included. That discipline already helps with civil enquiries and will matter more if recklessness becomes a criminal alternative charge.

If you use bookkeeping software or AI-assisted tax prep, keep human review in the loop. Export-ready drafts and review queues are useful — they are not a substitute for you or a qualified adviser checking declarations before submission to HMRC.

Map every statement on your next Self Assessment or CT600 that depends on judgment (expense classifications, capital vs revenue, residency, related-party interest). Note the source documents and any adviser sign-off.

Avoid last-minute estimates you cannot evidence. Where a figure is provisional, document why it was used and when it will be corrected — careless rounding under time pressure is how weak audit trails form.

Use FinnAccountings to keep bank feeds, expenses, and draft tax packs organised so you or your Chartered Accountant / ICAEW or ACCA adviser can review positions before filing. Start a free trial if you need a clearer prep workflow for Ireland and UK obligations.

For near-term UK Self Assessment cash planning, see our guide to the July payment on account deadline. For digital record-keeping ahead of Making Tax Digital, review the MTD ITSA first quarterly deadline briefing and the free UK/Ireland tax calculator for planning estimates — not filing.