TC09512 - [2025] UKFTT 00522 (TC)

In consequence of the admissions made through the CDF there is no dispute that the Appellants have deliberately failed to declare certain heads of income from their self-assessment tax returns for all years other than the year ended 5 April 2010. It is also accepted that the Assessments and Penalties were raised in accordance with the requirements of section 29 TMA and within the extended time limits provided for under section 34 TMA. Accordingly, the dispute between the parties on the Assessments for tax years ended 5 April 2011 – 2015 is a narrow one concerning the quantum of the Assessments. As regards tax year ended 5 April 2010 the Appellants contend that there was no income to assess.

We set out the detailed points of dispute below in the section entitled Specific Challenges to the Assessments (paragraph 57 to 60 below) as are they are better understood once the evidence has been narrated.

As regards the penalties the Appellants only challenge is that the penalty percentage is too high.

The burden of proof rests with the Appellant to establish that the Assessments overstate the tax due from them and that HMRC have failed to give full mitigation when determining the level of penalty to impose. They must do so on the balance of probabilities and by reference to the evidence.

We are entitled to consider all of the evidence available to us. Where we take a different view of the evidence to that taken by HMRC we may reduce the Assessments where we consider, on that evidence, the Assessments overstate the Appellant’s liability even if HMRC’s view of the evidence was a reasonable one. A similar approach may be adopted when considering whether HMRC have adequately reflected the co-operation given by the Appellants in calculation of the penalty percentage to be applied.