Following a prison sentence for benefit and mortgage fraud, a taxpayer in a recent case (Mr Tee v HMRC), was issued a notice by HMRC under FA 2008, Sch 36 requiring him to provide details of payments to workers and his own income as a financial advisor.
On failing to respond to the notice, he was issued with a penalty which he appeal, claiming that he had not traded as a financial advisor and that HMRC had already accepted that tax returns were not due for 2009/10 and 2010/11. At the Tribunal, he also claimed that he had not responded as the police still had his documentation.
The Tribunal agreed with the steps taken by HMRC, but found that the actual notice issued was too vague in terms of the information required, as well as being unspecific with regard to the time period in question. It was therefore very likely that the taxpayer would have a reasonable excuse for not complying.
They determined that the taxpayer’s appeal should be allowed, and HMRC should then make a fresh start on their proceedings.