This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

HMRC’s calculation of penalties was incorrect

By Mark McLaughlin, September 2022

The taxpayer failed to disclose rental income or a capital gain on the disposal of a property but HMRC’s discovery assessment was reduced for the taxpayer’s allowable expenditure with penalties reduced accordingly and were further reduced because HMRC used incorrect minimum penalties in carrying out the penalty calculations.

The appellant was a teacher who retired in 2010. In December 1994, he purchased a flat in London for £60,000. He never lived in the property, but his self-assessment return for each tax year until 2013/14 included rental income. In February 2014, the appellant disposed of the property for £300,000. The appellant filed his tax return for 2013/14 on time but did not include any capital gain on sale of the property, or any rental income for that tax year. 

In July 2018, HM Revenue and Customs (HMRC) opened a compliance check (under FA 2008, Sch 36), and attached a list of information required. Following

Subscribe to the McLaughlin’s Tax Case Library to get instant access
to the Tax Case Library.
14 day free trial , 90 day money back guarantee
Subscribe

Related or similar articles

Taxpayer’s property disposals were eligible for relief as parents’ house was job-related accommodation
By Mark McLaughlin, September 2025
Taxpayer who relied on non-genuine case law generated by AI did not have reasonable excuse for failure to notify chargeability
By Mark McLaughlin, February 2024
Individuals were required to be settlement beneficiaries for a one-year period
By Mark McLaughlin, June 2021
No goodwill existed on a business transfer upon incorporation
By Mark McLaughlin, May 2020
Capital loss for guarantee was deductible in the tax year of payment
By Mark McLaughlin, May 2019