The taxpayer’s self-employment income was underdeclared, the gain on sale of a property was taxable as self-employment income and capital gains tax applied to the sale of land and an investment property held in his wife’s name.
The appellant registered with HM Revenue and Customs (HMRC) as a self-employed ‘property developer’ in December 2016 and submitted self-assessment returns for the tax year 2006/07 onwards. HMRC contended that the appellant failed to declare income from self-employment for 2005/06 to 2012/13, failed to declare capital gains on the sale of property, and submitted an inaccurate self-assessment return for 2013/14. HMRC issued discovery assessments for 2005/06 to 2012/13 inclusive, an enquiry closure notice for 2013/14, and penalty assessments. The appellant appealed.
The appellant argued that HMRC’s calculation of his self-employment income (i.e., 2.5 times recorded expenses) was far too high. The First