Penalty is correct

The taxpayer was an overseas company carrying on business in the UK through a London branch. HMRC enquired in to the business’s tax return and found dividends had been omitted from taxable income.

The company’s tax adviser acknowledged the error and amended the return. The Revenue imposed a penalty under FA 2007 sch 24 for the inaccuracy.

The taxpayer appealed claiming it had relied on an accountant to prepare the return and computations.

The First-tier Tribunal accepted the contention but said the obligation to submit complete and correct returns rested with the company. A taxpayer could not “hide behind an adviser where the latter has not exercised the appropriate level of care”.

The error was careless caused by lack of reasonable care to take account of CTA 2009 s 931W which required dividend income received in relation to investment trading activities to be treated as...