This is a CoA classic. I think the judgment is a bit of a joke in allowing this taxpayer off the hook (to the tune of c£800k penalties), and in doing so it says being recklessly negligent re your tax affairs is not as bad as being dishonest (re deliberate bad behaviour - which is a trigger for lots of nasty tax penalties), so courtesy of the CoA you now have a readymade brand new get out of jail free card excuse for your client i.e. they weren't dishonest, just recklessly negligent! See paras 102 & 108:
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It didn't let him off the hook. It reduced an excessive penalty hopelessly out of sync with the tax at issue to simply a very large penalty of more than 100% of the tax payable.
I don't think that is allowed or, at least, it holes the deliberate case below the waterline. If HMRC aren't sure that the taxpayer's conduct was deliberate how can they make out a case that it was? It would amount to a complete lack of faith in their own case!
Under art 6 ECHR the accused must understand the nature and cause of the charge he is facing. That requires HMRC to plump and not make cases in the alternative.
Anyway this is was an ignorance of the law case. How could an accusation of carelessness have made a difference?
HMRC lost the penalty case as they failed to adduce sufficient evidence of the company's bad conduct and didn't cross-examine the director on the matter.
I'm not sure what this has to the discussion on whether an inaccuracy can be simultaneously careless and made on purpose. But it seems to me that point being made is that ignorance of the law can be a defence to an accusation of deliberately bringing about a loss of tax .
BTW 'this TJ bloke' represented the appellants in the UT in the bonkers case.