The recent Testa tribunal decision provides a useful argument to secure a penalty suspension. John Flood explains why accountants should be thanking Mr Testa.
Penalties for careless conduct may be suspended, as per FA 2007 Sch.24 para.14. The law, however, provides that HMRC may suspend all or part of a penalty only if compliance with a condition of suspension would help to avoid a person becoming liable to further such penalties.
HMRC interpreted this as meaning that penalties for “one off” inaccuracies cannot be suspended and have secured success in the tribunal with recent reasonable care cases as Fane v HMRC  UKFTT 210 and Hearn v HMRC  UKFTT 782. Testa v HMRC  UKFTT 151 bucks this trend .
About John Flood
John Flood is a retired barrister and ex-employee of HMRC. He is a co-author with George Rowell (Exchange Chambers, Manchester) of the new book, Tax Penalties: A Practitioners Guide (Sweet & Maxwell Thomson Reuters).