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Fraudulent activity of sub-agent caused tax loss

05 May 2022
Issue: 4839 / Categories: Tax cases
S McCumiskey  (TC8459)

The taxpayer’s life in 2015-16 was in turmoil. He had lost his job separated from his wife and used pay day loans to get by. However he decided to set up in business as an electrician. He had no experience of tax but a friend told him he would need to file self-assessment tax returns. The taxpayer’s first job as an electrician was for a colleague of B who was a director of Alpha Tax Consultants Ltd. The taxpayer instructed Alpha to deal with his tax return for 2015-16; he provided B with the information requested. B later told him that the matter was ‘sorted’ and that ‘he hadn't anything to pay’.

In March 2019 the taxpayer received a letter from HMRC concerning a claim for seed enterprise investment scheme (SEIS) relief. The taxpayer told the inspector he had never heard of SEIS had made...

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