Sarah Godliman v The Commissioners for HMRC
[2024] UKFTT 81 (TC)
Scott Thompson v The Commissioners for HMRC
12 February 2024
[2024] UKFTT 138 (TC)
First-tier Tribunal
Someone appealed late against a tax penalty for mistakes on their tax return. The judge said it wasn't deliberate, but they were careless for not checking their return properly even though they used an accountant. The penalty will be recalculated based on carelessness, giving the person a chance to appeal again.
Key Facts
- •Appeal against a penalty for inaccuracies in a 2014 tax return under Schedule 24 FA 2007.
- •Late appeal application granted.
- •Appellant, Scott Thompson, represented himself.
- •HMRC argued deliberate or careless inaccuracies.
- •Appellant claimed reliance on accountant and umbrella company (BFB) for tax deductions.
- •Appellant's tax return omitted income from BFB and Atlas Trustees Ltd.
- •Significant delay in appealing the penalty.
- •Tribunal lacked crucial documents from HMRC.
- •Appellant argued he effectively appealed within the initial 30-day period.
Legal Principles
Late appeal applications are decided using judicial discretion, considering delay length, reason for delay, and prejudice to both parties (balancing exercise).
Martland v HMRC [2018] UKUT 178 (TCC)
For a deliberate inaccuracy, HMRC must establish an intention to mislead the Revenue.
HMRC v Tooth [2021] 1 WLR 2811
Reasonable care is assessed by reference to a reasonable and prudent taxpayer with the appellant's personal and professional experience.
HMRC v William Ritchie and Hazel Ritchie [2019] UKUT 0071
Schedule 24 FA 2007 governs penalties for inaccuracies in tax returns, differentiating between careless and deliberate behaviour.
Schedule 24 Finance Act 2007
Outcomes
Late appeal application granted.
Appellant's justifiable belief that he had already appealed, outweighing the significant delay; HMRC's failure to provide crucial evidence.
Appeal against deliberate penalty allowed.
Insufficient evidence to establish deliberate intent to mislead; appellant's reliance on professionals.
Appeal against careless penalty dismissed.
Appellant failed to take reasonable care by not checking the tax return for omissions; a reasonable taxpayer would have done so despite reliance on professionals.