Some unidentified bank deposits were held to be the taxpayer’s undeclared business income, but certain cheque deposits did not represent undeclared business income, and penalties for the under-declaration of income in the taxpayer’s tax return should be calculated by reference to careless rather than deliberate behaviour.
The appellant, a self-employed event organiser, was subject to an enquiry by HM Revenue and Customs (HMRC) into her tax return for 2010/11. HMRC subsequently issued a closure notice amending the return and sought additional income tax, plus penalties. The appellant appealed.
The key issue in the appeal was whether unidentified bank deposits represented undisclosed trading income. It was contended by the appellant’s husband that he made regular deposits into her bank account to help pay their household bills, and that these deposits came from his activities as a professional poker
