Harte v Revenue and Customs (PENALTIES - classification of behaviours) [2024] UKFTT 493 (TC) (30 May 2024)

Harte v Revenue and Customs (PENALTIES - classification of behaviours) [2024] UKFTT 493 (TC) (30 May 2024)

The Tribunal found that the Appellant deliberately failed to declare income from TTL and other sources, justifying extended time limits for assessment and higher penalties for those inaccuracies. Errors regarding capital allowances and home office deductions were careless, not deliberate, and credit card expenditure errors arose despite reasonable care. The Tribunal reduced assessments and penalties accordingly, excluded credit card errors from assessments for earlier years, and found no reasonable excuse for VAT registration failure. The presumption of continuity was properly applied by HMRC.

Citation
[2024] UKFTT 493 (TC)
Parties
Appellant: Shaun Harte; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
30 May 2024
Procedural Posture
Tax Appeal (first Tier Tribunal, Tax Chamber) / Final Judgment After Substantive Hearing
Outcome
Appeal allowed in part
Legal Topics
Income Tax, Discovery Assessments, Penalties, VAT Registration, Time Limits for Assessment, Classification of Behaviours (deliberate, Careless, Reasonable Care)
Tax Law Income Tax Discovery Assessments Penalties VAT Registration Time Limits for Assessment Classification of Behaviours (deliberate, Careless, Reasonable Care)

Case Brief

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Parties

Shaun Harte

Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

Tax Appeal (first Tier Tribunal, Tax Chamber) / Final Judgment After Substantive Hearing

Legal Issues

  1. 1 Whether three identified receipts into the Appellant's bank accounts are income assessable to income tax
  2. 2 Whether certain items of expenditure met by TTL through use of the corporate credit card and not reimbursed by him represent income in the hands of the Appellant
  3. 3 Whether the Appellant is entitled to capital allowances and a deduction in respect of the amounts claimed for his home office

Ratio Decidendi

The Tribunal found that the Appellant deliberately failed to declare income from TTL and other sources, justifying extended time limits for assessment and higher penalties for those inaccuracies. Errors regarding capital allowances and home office deductions were careless, not deliberate, and credit card expenditure errors arose despite reasonable care. The Tribunal reduced assessments and penalties accordingly, excluded credit card errors from assessments for earlier years, and found no reasonable excuse for VAT registration failure. The presumption of continuity was properly applied by HMRC.

Court Disposition

Appeal allowed in part

Orders

  • Assessments and penalties reduced in accordance with Tribunal findings, excluding credit card errors where reasonable care was exercised and limiting earlier years' assessments for careless errors to 6 years.
  • No penalty for credit card errors; penalties for deliberate and careless errors reduced as specified.