Atkinson v Revenue and Customs (INCOME TAX/CORPORATION TAX : Penalty) [2016] UKFTT 387 (TC) (03 June 2016)

Atkinson v Revenue and Customs (INCOME TAX/CORPORATION TAX : Penalty) [2016] UKFTT 387 (TC) (03 June 2016)

The appellant was careless in making the £30,000 deduction claim without verifying entitlement and in failing to amend his return after being advised he was not entitled to entrepreneur’s relief. Disclosure was prompted, not unprompted. No special circumstances justified a further reduction, and the penalty should not be suspended.

Citation
[2016] UKFTT 387 (TC)
Parties
Appellant: Dr David Atkinson; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
03 June 2016
Procedural Posture
Income Tax/corporation Tax Penalty Appeal / Decision in Principle on Penalty Liability
Outcome
Appeal against penalty dismissed in principle; penalty at 15% upheld.
Legal Topics
Inaccuracy Penalty, Carelessness, Disclosure (prompted/unprompted), Special Circumstances, Suspension of Penalty
Tax Law Inaccuracy Penalty Carelessness Disclosure (prompted/unprompted) Special Circumstances Suspension of Penalty

Case Brief

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Parties

Dr David Atkinson

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax/corporation Tax Penalty Appeal / Decision in Principle on Penalty Liability

Legal Issues

  1. 1 Whether the appellant was careless in making claims for deductions and reliefs in his 2011/12 tax return
  2. 2 Whether the inaccuracy was discovered at a later time and reasonable steps were taken to inform HMRC
  3. 3 Whether disclosure was prompted or unprompted

Ratio Decidendi

The appellant was careless in making the £30,000 deduction claim without verifying entitlement and in failing to amend his return after being advised he was not entitled to entrepreneur’s relief. Disclosure was prompted, not unprompted. No special circumstances justified a further reduction, and the penalty should not be suspended.

Court Disposition

Appeal against penalty dismissed in principle; penalty at 15% upheld.

Orders

  • Penalty confirmed at 15% of potential lost tax revenue for careless inaccuracies in 2011/12 tax return.
  • No further reduction for special circumstances.