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 received into his bank account, justifying extended time limits and penalties for those sums. Errors in claiming capital allowances and home office deductions were careless, not deliberate, limiting the assessment period for those items. Errors relating to credit card expenditure arose despite reasonable care and were not subject to penalty or extended assessment. The presumption of continuity applied to the Appellant's business activities. The appeal was allowed in part, with reductions to assessments and penalties accordingly.

Citation
[2024] UKFTT 493
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, Presumption of Continuity
Tax Law Income Tax Discovery Assessments Penalties VAT Registration Time Limits for Assessment Classification of Behaviours Presumption of Continuity

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 received into his bank account, justifying extended time limits and penalties for those sums. Errors in claiming capital allowances and home office deductions were careless, not deliberate, limiting the assessment period for those items. Errors relating to credit card expenditure arose despite reasonable care and were not subject to penalty or extended assessment. The presumption of continuity applied to the Appellant's business activities. The appeal was allowed in part, with reductions to assessments and penalties accordingly.

Court Disposition

Appeal allowed in part

Orders

  • Assessments and penalties to be reduced in accordance with Tribunal's findings on income, allowable deductions, and VAT adjustment.
  • No penalty to be applied in respect of credit card expenditure errors where reasonable care was taken.