Carter v Revenue & Customs [2013] UKFTT 247 (TC) (18 April 2013)

Carter v Revenue & Customs [2013] UKFTT 247 (TC) (18 April 2013)

Appellant was not negligent in claiming capital repayments as deductions for property rental income due to reasonable reliance on his accountant; appellant was negligent in failing to keep adequate records and explain cash deficit in gardening business, justifying penalties subject to abatement for partial explanations and cooperation.

Citation
[2013] UKFTT 247
Parties
Appellant: Graham Carter; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
18 April 2013
Procedural Posture
Appeal / First Tier Tribunal Decision
Outcome
Appeal allowed in part
Legal Topics
Income Tax, Corporation Tax, Self Assessment, Penalties, Property Rental Income, Business Records, Negligence
Tax Law Income Tax Corporation Tax Self Assessment Penalties Property Rental Income Business Records Negligence

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Parties

Graham Carter

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether the appellant was negligent in claiming capital repayments as deductions in property rental income
  2. 2 Whether the appellant was negligent in failing to keep adequate records for the gardening business
  3. 3 Whether the cash deficit in the gardening business could be explained otherwise than by under-declaration of income

Ratio Decidendi

Appellant was not negligent in claiming capital repayments as deductions for property rental income due to reasonable reliance on his accountant; appellant was negligent in failing to keep adequate records and explain cash deficit in gardening business, justifying penalties subject to abatement for partial explanations and cooperation.

Court Disposition

Appeal allowed in part

Orders

  • Assessments and penalties for property rental income to be recalculated; appellant not liable for penalties in respect of property business negligence.
  • Assessments and penalties for gardening business upheld in part; penalties to be abated by 85%.