Tager & Anor v Revenue And Customs

Tager & Anor v Revenue And Customs

The Upper Tribunal erred in law by equating the taxpayer’s conduct with deliberate concealment and by taking 100% of the estimated tax at risk as the starting point for penalties. The correct approach under paragraph 50 of Schedule 36 is to have regard to the amount of tax unpaid, but to set penalties that are proportionate to the actual tax at risk and the circumstances of the case. The penalties must reflect the seriousness of the non-compliance but not be mechanically tied to the tax at risk, especially where the conduct is not dishonest.

Parties
Appellant/respondent: Romie Tager; Appellant/respondent: The Personal Representatives of the Estate of Osias Tager deceased; Respondent/appellant: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
20 July 2018
Procedural Posture
Civil Appeal (tax Penalties) / Appeal From Upper Tribunal (tax and Chancery Chamber) to Court of Appeal
Outcome
Appeal allowed; Upper Tribunal’s penalty decision set aside and re-made by Court of Appeal.
Legal Topics
Tax Related Penalties, Information Notices, Inheritance Tax, Income Tax, Tribunal Procedure, Penalty Quantification
Tax Law Civil Procedure Tax Related Penalties Information Notices Inheritance Tax Income Tax Tribunal Procedure Penalty Quantification

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Parties

Romie Tager

Appellant/respondent

The Personal Representatives of the Estate of Osias Tager deceased

Appellant/respondent

The Commissioners for Her Majesty’s Revenue and Customs

Respondent/appellant

Procedural Posture

Civil Appeal (tax Penalties) / Appeal From Upper Tribunal (tax and Chancery Chamber) to Court of Appeal

Legal Issues

  1. 1 What is the correct interpretation and application of paragraph 50 of Schedule 36 to the Finance Act 2008 regarding tax-related penalties for non-compliance with information notices?
  2. 2 Was the Upper Tribunal correct in its quantification of penalties imposed on the taxpayer, given the subsequently agreed amount of tax unpaid?
  3. 3 Did the Upper Tribunal err in law by equating the taxpayer’s conduct with 'deliberate concealment' under Schedule 55 to the Finance Act 2009?

Ratio Decidendi

The Upper Tribunal erred in law by equating the taxpayer’s conduct with deliberate concealment and by taking 100% of the estimated tax at risk as the starting point for penalties. The correct approach under paragraph 50 of Schedule 36 is to have regard to the amount of tax unpaid, but to set penalties that are proportionate to the actual tax at risk and the circumstances of the case. The penalties must reflect the seriousness of the non-compliance but not be mechanically tied to the tax at risk, especially where the conduct is not dishonest.

Court Disposition

Appeal allowed; Upper Tribunal’s penalty decision set aside and re-made by Court of Appeal.

Orders

  • Penalty for income tax notice non-compliance reduced to £20,000.
  • Penalty for inheritance tax notice non-compliance reduced to £200,000.