Finola Owens v The Commissioners for HMRC
[2024] UKFTT 192 (TC)
Stanley Augustine Herrmann v The Commissioners for HMRC
10 April 2024
[2024] UKFTT 303 (TC)
First-tier Tribunal
A man didn't pay taxes on rental income while in prison, claiming his agent was responsible. The court said he was still responsible, even while in prison, because he didn't properly instruct the agent about tax. He had to pay the taxes and penalties.
Key Facts
- •Appeal against discovery assessments and penalties for tax years 2002/03 to 2017/18.
- •Appellant (Herrmann) received rental income from properties but failed to declare it.
- •Herrmann was in prison from December 2002 to December 2012.
- •Herrmann claimed he relied on an estate agent (Martin) to handle tax matters.
- •HMRC argued there was no evidence Martin was engaged to deal with tax matters.
- •Assessments were based on Section 29 TMA 1970.
- •Penalties were based on Section 7(8) TMA 1970 and Schedule 41 FA 2008.
Legal Principles
Validity of assessments under Section 29 TMA 1970.
Taxes Management Act 1970
Time limits for assessments under Section 36(1A)(c) TMA 1970, including negligence test.
Taxes Management Act 1970 and Anderson (deceased) [2009] UKFTT 206
Tax liability while in prison.
Statute and case law interpretation
Reasonable excuse for failure to notify, as defined in Perrin [2018] UKUT 156 (TCC).
Perrin [2018] UKUT 156 (TCC)
Penalty calculations under Section 7(8) TMA 1970 and Schedule 41 FA 2008, including mitigation and special circumstances.
Taxes Management Act 1970 and Finance Act 2008
Outcomes
Appeal dismissed.
Assessments and penalties were validly raised; Herrmann was negligent in failing to notify; no reasonable excuse or special circumstances existed.