Anik v Revenue and Customs (INCOME TAX/CORPORATION TAX : Profits) [2016] UKFTT 395 (TC) (06 June 2016)

Anik v Revenue and Customs (INCOME TAX/CORPORATION TAX : Profits) [2016] UKFTT 395 (TC) (06 June 2016)

Discovery assessments were valid for 2005-06 to 2009-10 but not for 2011-12 and 2012-13, as HMRC failed to show deliberate or careless conduct for those years. Penalties under s 95 TMA were due for 2005-06 and 2006-07 but not for 2007-08 (no return). Schedule 24 penalties were due for 2008-09, 2009-10, and 2010-11 but not for 2011-12 and 2012-13 (no valid discovery assessments). HMRC’s profit calculations were unreliable; the appellant’s figures were accepted as more accurate.

Citation
[2016] UKFTT 395
Parties
Appellant: Murat Anik; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
06 June 2016
Procedural Posture
Income Tax & National Insurance Contributions Appeal / First Tier Tribunal (tax) Substantive Decision
Outcome
Partly allowed; assessments and penalties upheld in part and set aside in part.
Legal Topics
Income Tax, National Insurance Contributions, Discovery Assessments, Penalties, Self Assessment, Burden of Proof, Agency, Capital Gains Tax, Property Income
Tax Law Income Tax National Insurance Contributions Discovery Assessments Penalties Self Assessment Burden of Proof Agency +2 more

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Parties

Murat Anik

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax & National Insurance Contributions Appeal / First Tier Tribunal (tax) Substantive Decision

Legal Issues

  1. 1 Whether discovery assessments under s 29 TMA for various tax years were valid;
  2. 2 Whether penalties under s 95 TMA and Schedule 24 FA 2007 were due;
  3. 3 Whether the appellant’s tax returns and accounts were deliberately or carelessly incorrect;

Ratio Decidendi

Discovery assessments were valid for 2005-06 to 2009-10 but not for 2011-12 and 2012-13, as HMRC failed to show deliberate or careless conduct for those years. Penalties under s 95 TMA were due for 2005-06 and 2006-07 but not for 2007-08 (no return). Schedule 24 penalties were due for 2008-09, 2009-10, and 2010-11 but not for 2011-12 and 2012-13 (no valid discovery assessments). HMRC’s profit calculations were unreliable; the appellant’s figures were accepted as more accurate.

Court Disposition

Partly allowed; assessments and penalties upheld in part and set aside in part.

Orders

  • Discovery assessments for 2005-06 to 2009-10 upheld; assessments for 2011-12 and 2012-13 set aside.
  • Penalties under s 95 TMA for 2005-06 and 2006-07 upheld; penalty for 2007-08 set aside.