Mistake on tax return and penalties
During the 23/24 tax year I got some money that my grandad had invested.
He had put in ~£30000 and it had increased to ~£41000. It was offshore (Ireland) and at the time I did my self assessment (first time doing a self assessment) I thought it was capital gains I needed to pay on the ~£11k increase because it was an increase in investment.
I got a letter saying that HMRC thought I hadn’t declared offshore income and after some back and forth where I explained I had put it in the capital gains section they said it should be in income tax and I need to make a disclosure.
What I don’t know is which box I should tick in self-assessing behaviour & the impact this will have on the penalty I pay. I am tempted to say “submitted an inaccurate return despite taking reasonable care” because I did do my best to submit it correctly, but if they decide I have “not taken reasonable care” will I then face a higher penalty?
I’m also not sure what the penalty would be because it varies from 0% to 200% depending which compliance check fact sheet I read.
And will I ever get back the tax I paid as capital gains from when I did the self assessment, or do I have to pay both because I submitted it wrong?