Key Facts
- •Mr. Badjie appealed against penalties (£1,952.94 total) for inaccurate expense claims (2016-2020 tax years).
- •Closure notices were not appealed, only the penalties.
- •Mr. Badjie claimed significant business travel and other expenses without supporting documentation.
- •HMRC disallowed all expense claims, resulting in closure notices and penalties.
- •Mr. Badjie claimed he relied on his accountant and lacked knowledge of the claims.
- •Mr. Badjie made multiple calls to HMRC inquiring about his delayed tax refund.
- •Mr. Badjie admitted to providing his accountant with expense information without receipts.
Legal Principles
A penalty is payable if an inaccuracy in a document given to HMRC is due to a failure to take reasonable care.
Schedule 24, Finance Act 2007
The standard for reasonable care is that of a prudent and reasonable taxpayer.
David Collis v HMRC [2011] UKFTT 588 (TC)
Taxpayers cannot escape personal responsibility for returns by relying on a specialist unless highly specialized advice is required.
Stewarton Polo Club v HMRC [2011] UKFTT 668 (TC)
To succeed with a defense based on reliance on a professional advisor, the taxpayer must show that they sought help from a qualified professional, properly instructed, and checked the advice received.
Alexander Ayers v HMRC [2016] UKFTT 0190 (TC)
Outcomes
Appeal dismissed.
Mr. Badjie failed to demonstrate reasonable care; he knew about the large expense claims and anticipated a refund despite lacking supporting documentation. His reliance on his accountant was insufficient given the substantial nature of the claims and his lack of oversight.