Harrison v Revenue & Customs (INCOME TAX/CORPORATION TAX : Assessment/self-assessment) [2018] UKFTT 359 (TC) (28 June 2018)

Harrison v Revenue & Customs (INCOME TAX/CORPORATION TAX : Assessment/self-assessment) [2018] UKFTT 359 (TC) (28 June 2018)

The Tribunal found that the Appellant’s failure to notify chargeability was negligent conduct, given his professional background and the size of the income. The partnership was entitled to £200,000, not merely the cash received, and there was insufficient evidence of losses or expenses to reduce the taxable profit. Losses from the forensic accountancy trade could not be set against property development profits for 2007/08. The assessment was therefore upheld.

Citation
[2018] UKFTT 359 (TC)
Parties
Appellant: Paul Harrison; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
28 June 2018
Procedural Posture
Income Tax/corporation Tax Assessment/self Assessment Appeal / First Tier Tribunal (tax Chamber) Substantive Decision After Oral Hearing
Outcome
Appeal dismissed
Legal Topics
Income Tax, Discovery Assessment, Negligent Conduct, Self Assessment, Partnership Profits, Loss Relief, Time Limits for Assessment
Tax Law Income Tax Discovery Assessment Negligent Conduct Self Assessment Partnership Profits Loss Relief Time Limits for Assessment

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Parties

Paul Harrison

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 Decision After Oral Hearing

Legal Issues

  1. 1 Whether there was negligent conduct by the Appellant justifying a discovery assessment under Section 29 TMA 1970 for 2007/08
  2. 2 Whether the partnership profits were £200,000 or a lesser sum
  3. 3 Whether the Appellant could evidence losses or expenses to set against the profits

Ratio Decidendi

The Tribunal found that the Appellant’s failure to notify chargeability was negligent conduct, given his professional background and the size of the income. The partnership was entitled to £200,000, not merely the cash received, and there was insufficient evidence of losses or expenses to reduce the taxable profit. Losses from the forensic accountancy trade could not be set against property development profits for 2007/08. The assessment was therefore upheld.

Court Disposition

Appeal dismissed

Orders

  • Assessment under Section 29 TMA 1970 for 2007/08 confirmed against the Appellant
  • No reduction in assessed profits or tax liability due to lack of evidence of losses or expenses