Another HMRC c ock-up

https://caselaw.nationalarchives.gov.uk/ukftt/tc/2023/993

Didn't find your answer?

For years up to 2009/09, HMRC could have succeeded on the taxpayer's admitted negligence re DAs: See: https://www.accountingweb.co.uk/tax/business-tax/wilful-failure-to-deduc...

Also, we now know what constitutes recklessness re "deliberate" misconduct. See: https://www.accountingweb.co.uk/any-answers/justin-s-useful-tax-case

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By richard thomas
14th Dec 2023 14:24

May I refer the honourable member to his post of 09.41 today in the article 'HMRC scores £300k IR35 win in sports pundit case'?

And having looked at the case on the NA website I see that in fact we do not know from it "what constitutes recklessness re [sic] deliberate conduct":

"We are not satisfied that HMRC’s submissions demonstrate that recklessness is a sufficient basis for determining that an inaccuracy is deliberate or that a loss of tax was brought about deliberately. If there is such a basis, in view of our factual findings, we do not consider Mr Collier to have been reckless as to whether a loss of tax was brought about."

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Replying to richard thomas:
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By Justin Bryant
14th Dec 2023 14:34

Richard, my above post (from yesterday in fact) went into the Aweb back hole before I could finish and edit it (something to do with the word "c ock" perhaps) and it's suddenly reappeared in its draft, unedited (incorrect) form, so that's my (reasonable) excuse.

That said, the case link is in the subheading (I even got that right in the dodgy draft version!).

I think the case makes it reasonably clear that at least "blind-eye knowledge" is needed re "deliberate", rather than recklessness generally (whatever that means).

The more interesting point is the pre-2009/10 negligence thing. I now see that HMRC were probably right not to argue that, but the point (that negligence in that period is enough for a 20 year DA) does not seem unarguable to me and I am happy to be proved wrong there.

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By paulwakefield1
14th Dec 2023 15:10

Love the typo in the first line. At least I assume it's a typo...........

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Replying to paulwakefield1:
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By Justin Bryant
14th Dec 2023 15:12

Very good! Well spotted and I'll leave that Freudian slip unedited for the amusement of others.

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Replying to Justin Bryant:
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By richard thomas
17th Dec 2023 15:50

I don't think we need this case to determine if "reckless" is included in "deliberate". See the Supreme Court in Canada Square Operations Ltd v Potter [2023] UKSC 41, particularly 120-122.

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By Justin Bryant
17th Dec 2023 16:55

Well, the SC left that door open on tax re that in Tooth didn't they and the above case is UT and so I don't think it is unhelpful in confirming things. The Canada case is not cited as far as I can tell.

https://caselaw.nationalarchives.gov.uk/ukftt/tc/2023/993
https://www.supremecourt.uk/cases/uksc-2021-0139.html

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By Justin Bryant
18th Dec 2023 18:11

Not enough clickable case links here and it was FTT, not UT.

Also, per paras 44 & 57 here, it seems to me that blind-eye knowledge needs to be clearly pleaded (like fraud).

https://www.bailii.org/uk/cases/UKUT/TCC/2023/302.html

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