Member Since: 30th Jun 2017
6th Dec 2018
It may be bizarre, but nowhere near as bizarre as you seem to think.
As long as we are within para 17: if just £1 of tax was due, the FTT's reading of the law would mean a penalty of £1; if tax of £299 was due, the penalty would be £299.
Where it gets bizarre is that parliament has in plain words stated that a single penalty (i.e. six months delay) has to be £300 or more but a set of two penalties (i.e. six months and 12 months) can be less.
Why on earth would they enact a paragraph which limits multiple penalties if they didn't mean for there to be an actual restriction? My view remains that it was a defect in the legislation. One role of FTT and the superior courts is to find these and highlight them, so that parliament can get its act together and write legislation that actually makes sense.
23rd Oct 2018
In fact the judge mentioned this very point in his judgment.
It is yet another instance where HMRC has set itself the standard of issuing s8 notices to a class of people regardless of whether they are needed, and where HMRC officers appear to believe there is a s7 obligation even though there isn't.
As he points out, if you have an income of £5million all covered by PAYE, you don't have the remotest duty to notify HMRC of the fact - but they will still insist on sending you a tax return to fill in.
One of the problems with being an executive body is the tendency to confuse mere departmental policy with the law of the land. HMRC Policy can impose an obligation on HMRC staff, but it can't impose one on the taxpayer.
As has been pointed out, most HMRC staff never get to see the raw legislation. Even in my IR days (way back before SA), I was regarded as an anomaly, being a TO(HG) who actually read the TMA...
24th Sep 2018
I seem to recall, eons ago in the pre-SA days, a case where an Inspector decided to assess a woman on her earnings from prostitution but, being a bit prim and mealy-mouthed, he used the (then current) euphemism "French lessons" as the source of income.
At the Commissioners, he was asked whether he had any evidence that the lady actually taught French; on replying no, he was told that the assessment would be dismissed as it assessed a non-existent source....
Distant memory only, and might be purely apocryphal, but we can dream.
28th Feb 2018
Actually, since the claim related to the carry-back of loss relief from one year to the preceding year, it falls within TMA 1970 Schedule 1B. As a result, although it is calculated by reference to the earlier year's income and gains, it is executed as a claim of the later year. Which would enable carelessness to be used to extend the assessment window to April 2015.
That very thing (ie Tooth amending his 07/08 return for a later year loss when there was no statutory authority to do so) should have triggered an immediate enquiry, even without the fact that Tooth actually told them to raise one!