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Heavy penalties

09 May 2017
Issue: 4598 / Categories: Tax cases

K Kaczmarczyk (TC5744)

Obligation to file returns

HMRC sent the taxpayer notices to file returns under TMA 1970 s 8 but he disputed that he needed to so because he had no UK tax liability. He was a director of several companies but all were dormant. Further HMRC was satisfied that this was the case and that the taxpayer was unlikely to have received income or gains from them. HMRC imposed penalties totalling £3 300 for the non-filing.

The First-tier Tribunal said the taxpayer must have misunderstood his UK tax obligations and had he completed and submitted the returns he would have had no UK tax liability. The tribunal urged him to do this as soon as possible because he was obliged to under UK law.

The tribunal added that in view of the lack of any ‘substantive liability to UK tax the quantum of the penalties’...

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