Taxpayer learns the hard way for unreasonable behaviour
An unrepresented taxpayer has received increased daily penalties at tax tribunal after appealing those penalties for non-compliance with an information notice. He was also landed with a bill for costs.
You might also be interested in
Replies (9)
Please login or register to join the discussion.
The second decision by the Tribunal, on a reading, appears to have been made out of spite by the judge.
Whilst I'm not defending the appellant, this potentially sets a dangerous trend (even if not precedent) that appellants should be wary of.
While I have limited sympathy for Mr Wheeler who would have undoubtedly benefited from some representation, professional or otherwise. Is there any question of tax actually at stake here or is it merely punitive for wasting their time (time that we could have wasted in a a far more interesting way on another fruitless IR35 debacle)
"The Respondents asserted that the Appellant’s lifestyle could not be supported by this employment income alone. The officer asserted that the Appellant had part-funded the purchase of a house in the Caribbean in 2006 for $770,000, held in the name of his partner, and that historically he had regularly paid large credit card bills which exceeded his apparent income".
The write up also names his employer, which is a pub company which he owned half the shares in until shortly before this began and in which he was a director until the same time. At around the time HMRC started looking into his affairs he transferred his 50% to the other shareholder (his "partner"?) and resigned as a director.
A director of his own company taking an £8k salary - sounds about right. Director shareholder not filing a tax return for 15 years?
So whilst HMRC haven't got any concrete evidence of missing tax, they do seem to be exploring the right kind of avenues on a risk assessed basis.
Is it not true that HMRC also have taken cases to the Tribunal increasing costs to taxpayers for an unreasonable reason or purpose? However, I did not believe that the FTT could award costs (that is what stuck in my head from some other readings in the past).
Certainly, this case demonstrates that the taxpayer has not taken a proper approach and valid arguments for the appeal.
It's not a good idea to waste HMRC's time. Yes, but they certainly waste mine by taking far longer than 30 days to reply to letters and then failing to address the issue that I wrote to them about in the first place. And all these time costs for HMRC unreasonable behaviour has to be paid for by the client and their accountant. HMRC should put their own house in order.
"It’s not a good idea to waste HMRC’s or the FTT’s time, as this case plainly demonstrates."
Yes, but it's perfectly reasonable for HMRC to waste _our_ time, for which we are not recompensed.
I wonder how much time was actually wasted here? £4,800 would be about 100 man hours? For a few letters issued by a computer and an officer to make a couple of decisions?
Were the penalties and costs a small price to pay for not providing information ?
Perhaps some Wheeler Dealing going on here ?