HMRC has been criticised for its callous and unlawful treatment of a dyslexic painter and decorator who has the mental age of a 12 year old.
The Revenue said that John Clark, from Dunfermline, Scotland, who has had depression, owed tax of £17,779. However, this was a total of three estimated 'determinations' raised by HMRC for the years 2002/03 to 2005/06, without reference to his actual business records or accounts. The firm of accountants who acted for Clark from April 2013, calculated there was no actual tax due as his income was less than his personal allowance for those years.
Clark had worked part time as painter and decorator for about one year and then stopped when he split from his wife in 2003 after which he was the sole carer for his school-age daughter. His wife died in 2013.
His wife had helped him with his tax affairs until about March 2003.
In early 2006 a fire at Clark's house caused extensive damage. He could not return to live there for almost a year. His daughter left his house in 2009.
Clark said that he had no recollection of receiving tax returns or demands for payment nor would he have appreciated the significance of such documents. Clark is dyslexic. He had no representation at the tribunal and had all the documents read to him.
With his daughter’s help Clark wrote to HMRC in June 2011. There was no reply. The letter was returned, marked “sent to wrong department.”
Clark met HMRC three times in its Dunfermline office but without success, the tribunal heard. He was unable to communicate satisfactorily with their staff as they had not appreciated his learning difficulties.
The case [John Clark v HMRC, TC04509] hinged on whether HMRC should have granted Special Relief in respect of the estimated tax, and whether HMRC's pursuit of the tax was "unconscionable" considering the taxpayer's particular circumstances.
The tribunal judge, Kenneth Mure, ruled that HMRC's pursuit of the tax debt was "unconscionable" and cited a previous tribunal - William Maxwell v HMRC  UKFTT 459 - as a factor in his decision.
He said that HMRC didn't bear in mind Clark's severe learning difficulties, his reliance on his family and the likelihood that many tax documents may have been destroyed by his house fire.
HMRC's argument was "too narrow, inadequate, and lacking in consideration of the appellant’s peculiar vulnerability," Mure said. HMRC ignored Clark's "inability to engage fully and satisfactorily with the tax authorities."
About Nick Huber
I’m a specialist business journalist and have a particular interest in tax and technology.