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First-tier Tribunal made an error of law in concluding that the appellants’ conduct was deliberate

By Mark McLaughlin, October 2024

The Upper Tribunal held that the First-tier Tribunal used flawed objective reasoning when deciding that the conduct of the appellants was deliberate in submitting inaccurate tax returns relating to losses generated by a tax avoidance scheme found to be ineffective. 

The appellants appealed to the Upper Tribunal (UT) against a decision of the First-tier Tribunal (FTT) that there was a deliberate inaccuracy in their self-assessment returns for 2005/06, in which they had claimed losses as self-employed options traders. By the time of the appeal hearing before the FTT, the appellants accepted that they were not entitled to the claimed losses. The only issue to be decided by the FTT was whether the extended time limit applied for HM Revenue and Customs (HMRC) to issue discovery assessments, which required HMRC to establish that the loss of tax etc., was brought about deliberately. The FTT dismissed the appellants’ appeals. The appellants appealed. 

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