Unsatisfactory explanations of receipts by the taxpayer resulted in additional profits being assessed by HMRC that the tribunal subsequently found were overcharged, and the profits were reduced together with penalties for deliberate behaviour. 

The appellant submitted his self-assessment return for the tax year 2012/13 which indicated turnover of £10,234 and expenses of £7,011. He stated that he traded as a courier. HM Revenue and Customs (HMRC) opened an enquiry into the return. 

Following communications with the appellant, HMRC stated that as explanations had not been provided for certain deposits, HMRC would treat those deposits as income. Turnover was increased, and expenses were allowed at a rate of 20% of the turnover as a ‘reasonable estimate for any business