Recent cases have diverged on the question of whether HMRC must establish that carelessness caused a loss of tax, writes Ben Blades (Gray’s Inn Tax Chambers).
Many provisions of the UK tax code require HMRC to establish carelessness. For example if HMRC wants to raise assessments for income tax or capital gains tax more than four years after the end of the tax year to which the assessments relate HMRC must prove carelessness on the part of the taxpayer (TMA 1970 s 36). Similarly if HMRC wants to raise penalty assessments they must generally at a minimum establish carelessness on the part of the taxpayer (see for example FA 2007 Sch 24 para 1(3)).
Until recently it was clear that carelessness on its own in either of those contexts was not enough for HMRC unless they could also establish that the carelessness...
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Recent cases have diverged on the question of whether HMRC must establish that carelessness caused a loss of tax, writes Ben Blades (Gray’s Inn Tax Chambers).
Many provisions of the UK tax code require HMRC to establish carelessness. For example if HMRC wants to raise assessments for income tax or capital gains tax more than four years after the end of the tax year to which the assessments relate HMRC must prove carelessness on the part of the taxpayer (TMA 1970 s 36). Similarly if HMRC wants to raise penalty assessments they must generally at a minimum establish carelessness on the part of the taxpayer (see for example FA 2007 Sch 24 para 1(3)).
Until recently it was clear that carelessness on its own in either of those contexts was not enough for HMRC unless they could also establish that the carelessness...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
