Townend v Revenue and Customs (INCOME TAX/CORPORATION TAX : Penalty) [2016] UKFTT 276 (TC) (22 April 2016)

Townend v Revenue and Customs (INCOME TAX/CORPORATION TAX : Penalty) [2016] UKFTT 276 (TC) (22 April 2016)

The Appellant did not make full disclosure under the ODF and thus was not entitled to the 10% penalty rate. The penalty was correctly calculated based on the tax difference, including National Insurance contributions, and the Appellant's own Disclosure Report. The abatement for disclosure, cooperation, and seriousness was properly applied at 15%, 30%, and 5% respectively. There was no basis to reduce the penalty further by reference to the ODF or human rights arguments. The appeal is dismissed and the penalty determination is upheld.

Citation
[2016] UKFTT 276
Parties
Appellant: John Heeley Townend; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
22 April 2016
Procedural Posture
Income Tax/corporation Tax Penalty Appeal / First Tier Tribunal (tax) Substantive Decision
Outcome
Appeal dismissed
Legal Topics
Income Tax Penalties, Incorrect Tax Returns, Offshore Disclosure Facility, Abatement of Penalties, Disclosure and Cooperation, Human Rights in Tax Penalties
Tax Law Administrative Law Income Tax Penalties Incorrect Tax Returns Offshore Disclosure Facility Abatement of Penalties Disclosure and Cooperation Human Rights in Tax Penalties

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 6 Authorities cited 10 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Parties

John Heeley Townend

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax/corporation Tax Penalty Appeal / First Tier Tribunal (tax) Substantive Decision

Legal Issues

  1. 1 Whether the penalty imposed under s 95 TMA was excessive or unfair in light of the Offshore Disclosure Facility (ODF) and HMRC policy.
  2. 2 Whether the calculation of the 'tax difference' for penalty purposes was correct, including the inclusion of National Insurance contributions and treatment of share trading losses.
  3. 3 Whether the abatement for disclosure, cooperation, and seriousness was correctly applied.

Ratio Decidendi

The Appellant did not make full disclosure under the ODF and thus was not entitled to the 10% penalty rate. The penalty was correctly calculated based on the tax difference, including National Insurance contributions, and the Appellant's own Disclosure Report. The abatement for disclosure, cooperation, and seriousness was properly applied at 15%, 30%, and 5% respectively. There was no basis to reduce the penalty further by reference to the ODF or human rights arguments. The appeal is dismissed and the penalty determination is upheld.

Court Disposition

Appeal dismissed

Orders

  • Penalty determination under s 95 TMA upheld at 50% of the tax difference, amounting to £821,785.