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Taxpayers’ behaviour was not fraudulent/deliberate but was negligent/careless

By Mark McLaughlin, October 2020

The taxpayers’ behaviour was held to be negligent/careless and not fraudulent/deliberate for discovery assessment time limit and penalty purposes. 

HMRC opened enquiries into the appellants’ self-assessment returns for the tax year 2012/13. For that tax year, the first appellant had income from his self-employment as a mini-cab driver and from property. The second appellant had income arising from property. Both declared profits from those activities in that tax year.  

HMRC considered that the appellants’ income was under-declared for 2012/13. Using the presumption of continuity, HMRC also considered adjusting the profits for the tax years 2011/12 back to 1996/97, by uplifting the declared property ‘profits’. HMRC considered that the errors in the returns were due to deliberate actions and assessed

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