TC09619 - [2025] UKFTT 01020 (TC)

In summary Ms Aziz submitted as follows:

Officer Bennett satisfies the subjective and objective tests for having made a valid discovery assessment. As the appellant had submitted a return, HMRC rely on provisions of both section 29 (4) TMA (careless or deliberate behaviour) and section 29 (5) TMA (hypothetical officer).

As regards the former, it is clear from the letter of 16 September 2022 that Officer Bennett had considered deliberate behaviour. As regards the latter, the hypothetical officer could not have been aware of the insufficiency from the information made available at the time that the enquiry window for the years subject to the discovery assessments, closed.

The appellant has mounted no challenge to the amounts in the discovery assessments, nor to the validity of the enquiry and the subsequent closure notices, nor to the amendments made by those.

He has not provided any evidence to displace the additional tax set out in the discovery assessments, nor the additional tax arising from the closure notices. There is no evidence of the expenditure that he has claimed.

Nor has he provided any evidence of the rodent infestation which he claimed had resulted in the destruction of the relevant paperwork.

Furthermore, the expenses claimed were not incurred wholly and exclusively and necessarily in the performance of his duties. Protective equipment had been provided by his employer. There was no need for him therefore to make any claim for additional equipment. There is no evidence that he did so.

The amounts claimed by the appellant and his tax returns are different from those which he has subsequently provided during the course of the enquiry and thereafter.

The appellant has submitted deliberately inaccurate returns. Alternatively, they were submitted carelessly. Evidence of deliberate behaviour is set out in the penalty explanation letter and is also evidenced by the amendments made by the appellant to his tax returns for 2019/2020-2021/2022. The amounts made by those amendments to his expenses do not tally with the expenses originally claimed, nor with each other, nor with the amount subsequently provided by the appellant during the course of HMRC’s enquiries.

In summary the appellant submitted as follows:

He repeated the assertions regarding the expenditure set out at [7(31)-(39)] above.

He has not behaved deliberately even if he might have been careless. A taxpayer should not be penalised for events beyond his control. This included Covid and damage to the documents caused by the rodent infestation. An unintentional mistake does not automatically amount to deliberate behaviour.

He earns only £30,000 a year and having to discharge the tax liability and penalty would mean he could not meet his living expenses.

Covid was an emergency, and we should consider his appeal in the context of his frontline work and the fact that some of his colleagues lost their lives.

He has tried to provide evidence by way of bank statements and the loan documentation to justify the expenditure, but this evidence has been rejected by HMRC.