Property income accrued whilst the taxpayer was in prison was taxable, the taxpayer was negligent in his failure to notify income, and his use of an estate agent did not amount to a reasonable excuse for penalty purposes. 

HM Revenue and Customs (HMRC) opened an enquiry into the appellant’s tax affairs in May 2019, as they believed he had received property income which was not declared. The appellant agreed that he had purchased three properties, in November 2000 and November 2001 respectively, and that he had received rental income in respect of the properties. Following correspondence, HMRC issued discovery assessments and penalties for the tax years 2002/03 to 2017/18 (but excluding 2001/02 and 2003/04, as there was no income in those tax years). The appellant appealed. 

The appellant disputed HMRC’s calculations because: (1) Employment income had been included for 2002/03, and he stated that he was not in employment between