In G Carter v HMRC (No 2) (TC02661 – 1 May) HMRC formed the opinion that a trader (C) who owned a garden centre and also received rental income from several properties had underdeclared his income. They issued amendments to C’s returns and imposed penalties under TMA 1970 s 95 at the rate of 40% of the evaded tax. The FTT held that C had been negligent finding that he ‘was disorganised and simply failed to discharge the burden of showing us how he financed the apparent cash shortfall’. However the tribunal reduced the penalties to 15% of the evaded tax (allowing abatements of 20% for disclosure 30% for co-operation and 35% for seriousness).
Why it matters: The FTT upheld HMRC’s contention that the appellant had been negligent but significantly reduced the amount of the penalty...
