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 qualify for the ODF penalty as he failed to make full and timely disclosure. The penalty was correctly calculated based on the tax assessments, which included National Insurance contributions and did not allow for unclaimed share dealing losses. The abatement applied by HMRC (15% for disclosure, 30% for co-operation, 5% for seriousness) was appropriate in the circumstances. There was no legal basis to reduce the penalty by reference to the ODF or on grounds of fairness, ECHR, or EU Charter. The appeal was dismissed.

Citation
[2016] UKFTT 276 (TC)
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, Offshore Disclosure Facility, Abatement of Penalties, Incorrect Tax Returns, Disclosure and Co Operation, Seriousness of Offence
Tax Law Income Tax Penalties Offshore Disclosure Facility Abatement of Penalties Incorrect Tax Returns Disclosure and Co Operation Seriousness of Offence

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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 disproportionate in light of the Offshore Disclosure Facility (ODF) and HMRC abatement 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 dealing losses.
  3. 3 Whether the Appellant was entitled to greater abatement for disclosure and co-operation.

Ratio Decidendi

The Appellant did not qualify for the ODF penalty as he failed to make full and timely disclosure. The penalty was correctly calculated based on the tax assessments, which included National Insurance contributions and did not allow for unclaimed share dealing losses. The abatement applied by HMRC (15% for disclosure, 30% for co-operation, 5% for seriousness) was appropriate in the circumstances. There was no legal basis to reduce the penalty by reference to the ODF or on grounds of fairness, ECHR, or EU Charter. The appeal was dismissed.

Court Disposition

Appeal dismissed

Orders

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