Another tax avoidance does pay decision

https://files.pumptax.com/wp-content/uploads/2021/09/03155627/Decision-TC-2018-06225-Others-Geoffrey

Didn't find your answer?

Interestingly, if the advisor had been more competent & expert at SDLT the taxpayers would probably not have succeeded, which is ironic*. HMRC will be most upset (I'm not sure why there was no 20 year DA period for failing to file the amended SDLT return.) Well done to the taxpayers' counsel.

https://files.pumptax.com/wp-content/uploads/2021/09/03155627/Decision-T...

* also HMRC should have submitted some evidence per para 151, so this was really an HMRC c*ck-up and perhaps they should have instructed counsel (who might also have argued the 20 year DA point) rather than using an in-house HMRC litigator, especially when presumably there was a lot of SDLT at stake. 

Replies (4)

Please login or register to join the discussion.

VAT
By Jason Croke
07th Sep 2021 14:35

I quite like at 122 how the taxpayers denied being involved in an avoidance scheme and indeed, didn't even know what they were signing or getting into and quite rightly found as not credible by the Court.

Thanks (0)
Replying to Jason Croke:
avatar
By Justin Bryant
07th Sep 2021 15:13

Para 119 is possibly more amusing. Reading between the lines it's pretty clear his WS was not his own words but was drafted by a lawyer (by counsel probably) for him to sign and the judge failed to appreciate that possibility. His oral testimony was not helpful to his case, yet the judge "bought it" so to speak re the more on-piste WS .

Thanks (0)
avatar
By Justin Bryant
07th Sep 2021 14:50

In fact, reflecting on this, possibly the judge should have spotted the 20 year DA period point herself (which requires no taxpayer carelessness/negligence) per paras 16 & 22, and assuming that's right this is yet another example of FTT judges not understanding SDLT (you'd think she would have at least mentioned why this was not relevant - I cannot fathom why it was not relevant).

Thanks (1)
avatar
By Justin Bryant
14th Sep 2022 11:06

The Tribunal has added insult to injury here for HMRC in this Appellants' cost application, although the Tribunal did not fully stick the knife in by only awarding a token £1 costs, as they clearly thought the Appellants were rather pushing their luck (as it was those very same HMRC case management errors that caused their huge SDLT windfall).

https://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j12530/TC...

I think the Tribunal have been a bit hard on HMRC here (especially paras 52, 59 & 60), as it seems it’s only because the promoter stopped acting that the taxpayer avoided the problem in the link below (where no evidence of negligence was needed for an obvious i.e. self-evident agent error, where the agent ought to have known the correct position and arguably* this SDLT agent ought to have known an SDLT1 amendment was needed).

https://www.macfarlanes.com/what-we-think/in-depth/2022/johnson-and-john...

Also, it's strange that the 20 year DA time limit for failing to submit an (amended) SDLT1 was again overlooked (despite the requirement for an amended SDLT1 being made pretty clear in para 28). The Tribunal seems to obliquley agree with me that HMRC should perhaps have instructed counsel on such a high value case.

So the lesson is, if you use a dodgy promoter who will disappear at the first sign of trouble you'll probably be alright if HMRC are not on the ball.

* that was all that was needed for HMRC to win on costs at para 47 here: https://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j12527/TC...

Thanks (0)