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Penalties For Errors: Taxpayer Took Reasonable Care In Relying On Professional Advice

By Mark McLaughlin, June 2016
Summary

A taxpayer was not liable to a penalty for a careless inaccuracy in his tax return, as he had taken reasonable care to avoid the inaccuracy after obtaining professional advice on the matter that resulted in it.

Background

The appellant was non-UK resident until 16 April 2004, when he came to the UK to take up employment with an American investment bank (BS). He was resident but not ordinarily resident in the UK from then until 5 April 2007, after which he was both resident and ordinarily resident in the UK.

BS suffered financial difficulties. Some of its employees, including the appellant, were transferred to another investment bank (GS). The appellant took up his employment with GS on 1 September 2008. He subsequently left GS on 10 August 2010, and received a termination payment.

The appellant reported the termination payment on his
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