The taxpayer’s income from producing medical reports was generally required to be brought into account for tax purposes when an invoice was submitted with the report.
The appellant undertook work providing medical reports for litigation purposes for a number of agencies. Payment was not generally received by the appellant until the report had been accepted by the client, which was often many months after the provision of the report.
The appellant accounted for the medical report income on a receipts basis. HM Revenue and Customs (HMRC) opened an enquiry into the appellant’s tax return for 2010/11. HMRC made adjustments to the appellant’s tax return on closure of the enquiry, which (among other things) increased turnover for the period to reflect when invoices were issued, rather than when they were paid. The appellant appealed.
The First-tier Tribunal (FTT) noted that (under
