Penalties for a careless tax return error were suspended for 24 months on condition that the taxpayer engaged a professional accountant or tax adviser to prepare his tax returns, and that the returns would be filed and the tax paid by the due dates.
The taxpayer was a self-employed locum pharmacist. HM Revenue and Customs (HMRC) opened an enquiry into the taxpayer’s tax return for 2009/10, and also into the tax affairs of a company owned by the taxpayer. Three issues arose from the enquiry, which were the subject of an appeal by the taxpayer before the First-tier Tribunal (FTT).
The first issue related to an interest deduction claimed by the taxpayer in respect of a loan used to finance the acquisition of guaranteed equity bonds by the taxpayer. The purpose of the acquisition was to provide the taxpayer with income in his retirement (which he described as a “self-investment personal plan” (sic) or “SIPP”).
