TC09600 - [2025] UKFTT 00919 (TC)

Mr Milhill filed his 2014-15 tax return in October 2018. It included a claim for partnership expenses of £136,330 which he had incurred personally, and a claim for capital losses of £233,606.23. When that SA return was filed, Mr Milhill was charged a late payment penalty of £1,022.

On 26 April 2019, Mrs J McGuire, an Inspector of Taxes, opened an enquiry into the 2014-15 return, but received no reply to her opening letter. She issued a Notice under Sch 36, para 1 (“a Sch 36 Notice”), but again there was no response. This was followed on 16 July 2019 by a fixed penalty of £300 and on 27 August 2019 by daily penalties of £1,760, making an overall total of £2,160. The penalty notices were copied to Haines Watts; they each included the time limit for an appeal, being 30 days after issuance.

On 22 November 2019, Mr Gary Loughlin of Haines Watts belatedly responded to Mrs McGuire’s opening letter. He said that Mr Milhill was currently “collating supporting documentation” for the claimed partnership expenses; he accepted that Mr Milhill had omitted (a) earnings from one of the companies for which he was a director and (b) a capital gain which he said was yet unquantified. He promised to provide Mrs McGuire with more information about rental profits and the loss claim. Mrs McGuire subsequently sent three further letters to Haines Watts and to Mr Milhill (at Ms Griffiths’ address), but received no reply.

Between December 2019 and the end of 2020, Mr Milhill was raising funds for a global technology business; this involved travel to Dubai, the USA and Antigua and included a three month stay in Dubai. While in those locations Mr Milhill liaised with and met potential investors; in the USA he also met with the people who controlled various patents. During this time, he was in weekly contact with Ms Griffiths, other than when she was unwell, see §50 below.

On 2 March 2020, Mrs McGuire issued a closure notice and amended Mr Milhill’s 2014-15 return, increasing the tax payable by £325,727.35. The closure notice included the time limit for an appeal, being 30 days after issuance. It was sent to Mr Milhill (at Ms Griffiths’ address) and copied to Haines Watts.