Different approach

HMRC opened an enquiry into the taxpayer’s 2003/04 tax return because he declared he had no income for the year when in fact he had worked and also received bank deposits totalling about £79 500.

The Revenue concluded that the taxpayer had been negligent in completing the return and imposed a penalty at 60% of the tax assessed. The department said the taxpayer’s omission had been blatant particularly since he had received earnings from employment.

The First-tier Tribunal noted that the maximum fine was 100% of tax assessed but the taxman had mitigated it by 20% for cooperation and 20% for seriousness.

The judge said the tribunal was entitled to “take an overall view of the appropriate penalty” and was “not obliged to follow HMRC’s approach of giving abatements for various categories of conduct”.

The taxpayer had been negligent in not declaring taxable income in his return...