Herbert v Revenue & Customs (INCOME TAX/CORPORATION TAX : Assessment/self-assessment) [2015] UKFTT 203 (TC) (07 May 2015)

Herbert v Revenue & Customs (INCOME TAX/CORPORATION TAX : Assessment/self-assessment) [2015] UKFTT 203 (TC) (07 May 2015)

The appellant failed to discharge the burden of proving that HMRC's assessments were excessive or incorrect. The Tribunal found that the appellant was the proprietor of the beach café, had under-reported or failed to report taxable income from the motor business, café, and rental properties, and was negligent in failing to keep proper records and submit accurate returns. HMRC's discovery assessments and penalties were valid, issued within statutory time limits, and based on reasonable methodologies given the lack of cooperation and records from the appellant.

Citation
[2015] UKFTT 203 (TC)
Parties
Appellant: John Herbert; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
07 May 2015
Procedural Posture
Income Tax/corporation Tax Assessment/self Assessment Appeal / First Tier Tribunal (tax Chamber) Substantive Hearing and Decision
Outcome
Appeal dismissed
Legal Topics
Income Tax Assessments, Discovery Assessments, Negligence in Tax Returns, Self Employment Vs Employment Status, Taxation of Compensation Receipts, Rental Income Tax Liability, Burden of Proof in Tax Appeals, Penalties for Non Compliance
Tax Law Social Security Law Income Tax Assessments Discovery Assessments Negligence in Tax Returns Self Employment Vs Employment Status Taxation of Compensation Receipts Rental Income Tax Liability +2 more

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Parties

John Herbert

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax/corporation Tax Assessment/self Assessment Appeal / First Tier Tribunal (tax Chamber) Substantive Hearing and Decision

Legal Issues

  1. 1 Whether the appellant was liable to income tax and Class 4 NIC on profits from a motor business, a beach café, and rental income
  2. 2 Whether the appellant was the proprietor or employee of the beach café
  3. 3 Whether HMRC's discovery assessments and penalties were valid and within time limits

Ratio Decidendi

The appellant failed to discharge the burden of proving that HMRC's assessments were excessive or incorrect. The Tribunal found that the appellant was the proprietor of the beach café, had under-reported or failed to report taxable income from the motor business, café, and rental properties, and was negligent in failing to keep proper records and submit accurate returns. HMRC's discovery assessments and penalties were valid, issued within statutory time limits, and based on reasonable methodologies given the lack of cooperation and records from the appellant.

Court Disposition

Appeal dismissed

Orders

  • All HMRC assessments to income tax, Class 4 NIC, and penalties for the relevant years are upheld.