You filed your tax return. Months later you spot a mistake. A figure is wrong, income is missing, or a relief was claimed twice.
Most people would fix it. But right now the law does not spell out a clear duty to do so. Draft legislation published by HMRC on 13 July 2026 would change that, and it would raise the price of doing nothing.
Important: these are proposals, not law. Here is what the proposed duty to correct tax return errors would mean, and what you should do today.
The proposed duty to correct
Under the draft rules, once you become aware that a return or document you gave HMRC is inaccurate, you would have a statutory duty to take reasonable steps to correct it. If you cannot make the correction yourself, you would have to tell HMRC about it.
This would apply across the taxes HMRC administers, including income tax, corporation tax, PAYE, National Insurance, and VAT.
The Customer Correction Notice
The draft legislation also gives HMRC a new power: the Customer Correction Notice. HMRC could send you a notice requiring you to check your position. You would then have to correct the suspected inaccuracy or explain why no correction is needed.
The aim, in HMRC’s words, is to resolve simple, common issues more quickly and proportionately, so compliance teams can focus on complex cases.
The cost of doing nothing
This is the sharp end of the proposal. If you become aware of an inaccuracy and fail to take reasonable steps to correct it or tell HMRC, the draft rules would treat the original inaccuracy as deliberate for penalty purposes.
That changes the maths under Schedule 24 of the Finance Act 2007:
- Careless errors: penalties of up to 30% of the potential lost revenue.
- Deliberate errors: penalties of up to 70%.
- Deliberate and concealed errors: penalties of up to 100%.
Deliberate behaviour also extends HMRC’s assessment window to 20 years. So ignoring a known error could mean a much larger penalty, and a much longer period in which HMRC can come back to you.
None of this is law yet
Read that again, because it matters. The draft legislation was published on 13 July 2026 for the Finance Bill 2026-27. The technical consultation closed on 7 September 2026. The outcome is still awaited, and the final contents of the Finance Bill are subject to government decisions.
Do not treat the duty as being in force. It may change before it becomes law, and no start date has been set.
What to do today
Proposals or not, the sensible steps are the same.
Check your recent returns. If something looks wrong, look into it now rather than later. Under the proposals, the clock starts when you become aware of the error. The same applies to errors in MTD quarterly updates.
Amend within the window. You can usually amend a Self Assessment return within 12 months of the filing deadline. The GOV.UK guidance on correcting your Self Assessment tax return explains how.
Use the disclosure service for older issues. If the amendment window has closed, HMRC’s digital disclosure service is the route for putting things right. And if the problem started with a missed registration, see what to do now if you missed the 5 October Self Assessment registration deadline.
Note when you spotted the error. Keep a simple record: what you found, when you found it, and what you did. Good records show you took reasonable steps.
Get advice if you are unsure. If you cannot tell whether something is actually an error, or the figures are large, speak to a qualified tax professional before you act.
Frequently Asked Questions
There is no explicit statutory duty in the form HMRC is proposing. Under current rules, failing to correct a known error can already count against you, but the draft legislation would make the duty explicit and attach tougher consequences.
A proposed new HMRC power. HMRC could issue a notice requiring you to check your position and either correct a suspected inaccuracy or explain why no correction is needed.
The draft rules would treat the inaccuracy as deliberate for penalty purposes. That raises the maximum penalty to 70% of the potential lost revenue (100% if deliberate and concealed) and extends the assessment window to 20 years.
No start date has been set. The measure is still draft legislation, the consultation closed on 7 September 2026, and the outcome is awaited.
The proposal covers returns and documents across the taxes HMRC administers, including income tax, corporation tax, PAYE, National Insurance, and VAT.
No. Correct it now through the normal routes. Waiting only increases interest, and under the proposals it could increase penalties too.
Disclaimer:
This guide provides general information about HMRC’s proposed duty to correct tax return errors as of October 2026. Tax rules and government announcements can change. Nothing in this article is tax advice. Always consult with a qualified tax professional about your specific circumstances. That’s what we’re here for. In accordance with our normal practice we give this reference in good faith and in confidence, without legal liability on the part of the author or the company. The author assumes no responsibility or liability for any errors or omissions in the content of this site
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