Hardy v Revenue & Customs [2011] UKFTT 592 (TC) (12 September 2011)

Hardy v Revenue & Customs [2011] UKFTT 592 (TC) (12 September 2011)

The appellant was careless in omitting the redundancy payments from his tax return, as he failed to inform his accountant or seek advice despite the substantial nature of the payments and his professional background. However, HMRC's failure to consider special circumstances was a flaw, and the penalty should be reduced to 2.5% of the potential lost revenue. The decision not to suspend the penalty was not flawed as the error was unlikely to recur and no meaningful conditions could be set.

Citation
[2011] UKFTT 592
Parties
Appellant: Thomas Hardy; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
12 September 2011
Procedural Posture
Tax Penalty Appeal / First Tier Tribunal (tax) Decision
Outcome
Appeal dismissed in relation to carelessness and suspension; allowed in part regarding penalty reduction for special circumstances.
Legal Topics
Income Tax, Penalty Assessment, Carelessness, Suspension of Penalty, Special Circumstances
Tax Law Income Tax Penalty Assessment Carelessness Suspension of Penalty Special Circumstances

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Parties

Thomas Hardy

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Penalty Appeal / First Tier Tribunal (tax) Decision

Legal Issues

  1. 1 Whether the appellant was careless in omitting redundancy payments from his tax return
  2. 2 Whether HMRC's decision not to suspend the penalty was flawed
  3. 3 Whether special circumstances justified a reduction of the penalty

Ratio Decidendi

The appellant was careless in omitting the redundancy payments from his tax return, as he failed to inform his accountant or seek advice despite the substantial nature of the payments and his professional background. However, HMRC's failure to consider special circumstances was a flaw, and the penalty should be reduced to 2.5% of the potential lost revenue. The decision not to suspend the penalty was not flawed as the error was unlikely to recur and no meaningful conditions could be set.

Court Disposition

Appeal dismissed in relation to carelessness and suspension; allowed in part regarding penalty reduction for special circumstances.

Orders

  • Penalty reduced to 2.5% of the potential lost revenue due to special circumstances.
  • Appeal otherwise dismissed.