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Agent’s letters were insufficient to notify HMRC of taxpayer’s chargeability to tax on rental income

By Mark McLaughlin, June 2024

Letters sent by the taxpayer’s agent notifying HMRC of the taxpayer’s tax liability on rental income provided insufficient information to HMRC and appeals against discovery assessments and penalty charges were dismissed. 

On 5 February 2018, the appellant’s agent wrote to HM Revenue and Customs (HMRC) informing it of the appellant’s liability to tax for 2016/17. The letter stated: “We are writing to give notice of liability to tax under TMA 1970 s 7(1) for tax year [2016/17]. We acknowledge that this notice is after the deadline of 5 October 2017. However, we believe our client has a reasonable excuse in that it has taken our client some time to self-assess whether any tax is due…” On 16 January 2019, the agent sent a similar letter to HMRC but used the word ‘chargeability’ instead of ‘liability’. In March 2019, HMRC replied requesting information about the source of their client’s

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