Locke v Revenue and Customs (INCOME TAX - failure to notify chargeability to income tax - rental income - whether deliberate or careless - s.7 Taxes Management Act 1970 - schedule 41 Finance Act 2008) [2025] UKFTT 956 (TC) (07 August 2025)

Locke v Revenue and Customs (INCOME TAX - failure to notify chargeability to income tax - rental income - whether deliberate or careless - s.7 Taxes Management Act 1970 - schedule 41 Finance Act 2008) [2025] UKFTT 956 (TC) (07 August 2025)

The appellant was under a clear obligation to notify HMRC of chargeability to income tax for the tax years 2020/21 and 2021/22. The 2007 HMRC letter did not absolve this obligation, and the appellant's disclosures in 2006 and 2018 did not cover the relevant years. The failure to notify was deliberate but not concealed, and penalties were correctly calculated and reduced. No special circumstances or reasonable excuse applied.

Citation
[2025] UKFTT 956
Parties
Appellant: Darren Locke; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
07 August 2025
Procedural Posture
Tax Appeal / First Tier Tribunal Judgment
Outcome
Appeal dismissed
Legal Topics
Income Tax, Failure to Notify Chargeability, Penalties, Rental Income, Schedule 41 Finance Act 2008, Section 7 Taxes Management Act 1970
Tax Law Income Tax Failure to Notify Chargeability Penalties Rental Income Schedule 41 Finance Act 2008 Section 7 Taxes Management Act 1970

Case Brief

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Parties

Darren Locke

Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Judgment

Legal Issues

  1. 1 Whether HMRC issued penalties correctly for failure to notify chargeability to income tax for 2020/21 and 2021/22
  2. 2 Whether penalty amounts are excessive or unreasonable
  3. 3 Whether the appellant's behaviour was deliberate or careless

Ratio Decidendi

The appellant was under a clear obligation to notify HMRC of chargeability to income tax for the tax years 2020/21 and 2021/22. The 2007 HMRC letter did not absolve this obligation, and the appellant's disclosures in 2006 and 2018 did not cover the relevant years. The failure to notify was deliberate but not concealed, and penalties were correctly calculated and reduced. No special circumstances or reasonable excuse applied.

Court Disposition

Appeal dismissed

Orders

  • Penalties for failure to notify chargeability to income tax for 2020/21 and 2021/22 upheld
  • No reduction for special circumstances