Kantopoulos v Revenue & Customs No. 2 (INCOME TAX - discovery assessments) [2019] UKFTT 470 (TC) (19 July 2019)

Kantopoulos v Revenue & Customs No. 2 (INCOME TAX - discovery assessments) [2019] UKFTT 470 (TC) (19 July 2019)

The Tribunal found that the discovery assessment was valid as the accruals basis only became apparent to HMRC at the March 2017 hearing, and the assessment was issued promptly thereafter, so the discovery was not stale. The quantum of the assessment was varied to account for a timing difference but otherwise confirmed, as the appellant failed to discharge the burden of proving overcharge. The penalty was varied in line with the revised quantum but otherwise confirmed, as the appellant's conduct was careless and no reasonable care was demonstrated.

Citation
[2019] UKFTT 470 (TC)
Parties
Appellant: Georgios Kantopoulos; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
19 July 2019
Procedural Posture
Income Tax Appeal (discovery Assessment and Penalty) / First Tier Tribunal (tax Chamber) Final Decision
Outcome
Appeal dismissed (save for minor variation in quantum and penalty)
Legal Topics
Income Tax, Discovery Assessments, Penalties for Inaccuracy, Accruals Basis Accounting, Burden of Proof, Time Limits for Assessment
Tax Law Income Tax Discovery Assessments Penalties for Inaccuracy Accruals Basis Accounting Burden of Proof Time Limits for Assessment

Case Brief

Summary, issues, holding and outcome

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Parties

Georgios Kantopoulos

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax Appeal (discovery Assessment and Penalty) / First Tier Tribunal (tax Chamber) Final Decision

Legal Issues

  1. 1 Whether the discovery assessment under s.29 TMA 1970 for 2010-11 was valid and within time limits
  2. 2 Whether the quantum of the assessment was correct, considering accruals basis and timing of income
  3. 3 Whether the penalty under Schedule 24 FA 2007 was valid and correctly calculated

Ratio Decidendi

The Tribunal found that the discovery assessment was valid as the accruals basis only became apparent to HMRC at the March 2017 hearing, and the assessment was issued promptly thereafter, so the discovery was not stale. The quantum of the assessment was varied to account for a timing difference but otherwise confirmed, as the appellant failed to discharge the burden of proving overcharge. The penalty was varied in line with the revised quantum but otherwise confirmed, as the appellant's conduct was careless and no reasonable care was demonstrated.

Court Disposition

Appeal dismissed (save for minor variation in quantum and penalty)

Orders

  • Discovery assessment for 2010-11 confirmed subject to variation for timing difference
  • Penalty under Schedule 24 FA 2007 varied in line with revised quantum