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Footballer takes penalty after accountant error

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18th Jul 2016
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The first tier tribunal (FTT) rejected Derby County striker Nicholas Blackman’s appeal against an inaccuracy penalty, ruling that the striker should have picked up his accountant’s error before submitting his tax return (Blackman v HMRC [2016] TC 05218]).

Blackman, who signed for Derby in January, was originally fined for understating income on his tax return. During the 2012-13 season the footballer played for three clubs, transferring from Blackburn Rovers and Sheffield United, then on to Reading, but the tax return prepared by his previous accountants did not declare £45,000 of income made during his first employment with Blackburn Rovers during the 2012-13 tax year.

The striker acknowledged the error and paid additional tax of £7,612, but the 26-year-old appealed HMRC’s careless inaccuracy penalty of £1,142, stating that had “every right” to expect his accountants to prepare his return correctly and he was not responsible for the inaccuracy.

‘Not a financial wizard’

Arguing his case, Blackman’s legal team said he employed professional accountants to deal with his affairs “in the same way that he wouldn't deal himself with any football injuries he might have but employ the use of physiotherapists, doctors, etc.”

At the tribunal the footballer’s representatives said he was “not a financial wizard” and that he would be unlikely to have understood the tax return, even if he had checked it.

Blackman’s financial information was collected by his mother then passed to the accountants to complete the tax return fully and accurately.

‘An honest, but careless mistake’

The court was provided with no admissible evidence that Blackman could not understood a tax return. Taking this, the fact that he had been a professional footballer for several years, and the relative simplicity of the scenario into account, the FTT rejected the appeal, ruling that Blackman had not taken reasonable care to avoid the inaccuracy and was therefore careless.

Dismissing the appeal Judge Christopher McNall stressed that no dishonesty was alleged against Blackman and that the affair had been “an honest, but careless, mistake”. However, although the mistake was made by his former accountants, McNall went on to state that it was Blackman's duty to check the return before it was sent.

"Transfers are milestone events in the lives and careers of professional footballers”, said McNall. “Whether the transfer is for better or worse, they bring about an immediate change of club, manager, team-mates, home ground, prestige and income.

“Mr Blackman cannot possibly have forgotten, or not known, when authorising the filing of his tax return in April 2014, that he had been transferred twice, and hence had been employed by three clubs, between April 2012 and April 2013.

“Mr Blackman would have been expected to identify the error. It was an entirely obvious one to anyone reading the tax return with sufficient care.”

Replies (4)

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By AJ05
18th Jul 2016 17:44

Huh footballers? I know there is stigma of them being forgetful but come on? How can you possibly have forgotten? I agree with the judge, completely.

Just take the pen Nic.

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By User deleted
18th Jul 2016 18:23

Should be struck off

Cos he's a striker.....geddit? ;)

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Replying to User deleted:
By cfield
21st Jul 2016 22:35

Why didn't he just ask for the penalty to be suspended as it was a careless error?

Rio Ferdinand made a careless error once and served a 9 month suspension for it, so he should count himself lucky.

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By Duggimon
22nd Aug 2016 12:05

IMO the fault lies with the accountants, assuming the footballer furnished them with the required information, he should be seeking recompense from them rather than requesting HMRC write off the penalty.

Of course, if they omitted the income because he never provided them with the information then on his own head be it.

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