On Friday 10 th October, we held our annual Barn Dance and wow, what a night it was! With fantastic food, magnificent music and an amazing atmosphere, this may well have been the best one yet! The event was an incredible success, with us raising...
Anyone who requires assistance with their tax affairs should ensure that they deal with a reputable and appropriately regulated advisor. Recently, a courier who claimed rebates for work expenses on the basis of misleading advice was unsuccessful in his appeal against discovery assessments totalling £3,577.
Several of his colleagues had been approached by a company that offered to obtain tax rebates relating to subsistence expenses and uniform cleaning. They each received payments of around £3,000. He contacted the company to see if he was due any rebate. The company informed him of the amount ostensibly due to him, which he approved, and submitted tax returns for him containing rebate claims.
HM Revenue and Customs (HMRC) later contacted him to check his tax position for the 2020/21 tax year. HMRC concluded that the expenses claimed were not allowable, save for a flat-rate allowance for uniform cleaning, and issued discovery assessments in respect of the 2016/17 to 2020/21 tax years. After a review by HMRC upheld that decision, he appealed to the First-tier Tribunal (FTT).
The FTT noted that, under Section 29(6) of the Taxes Management Act 1970, only information provided by the taxpayer or a person acting on the taxpayer's behalf counts in relation to HMRC's ability to raise a discovery assessment. The courier was unaware that the tax returns had been submitted. However, he had specifically authorised the company to claim a tax rebate on his behalf and had approved the amount of that claim. The company had done exactly what he had authorised it to do. It had therefore been acting on his behalf in submitting the tax returns.
The discovery assessments for the 2016/17 and 2017/18 tax years had been made outside the four-year time limit in Section 34 of the Act. For those assessments to be valid, HMRC would need to show that the loss of tax was brought about carelessly or deliberately under Section 36. Although the courier had approved the amount of the claim, the FTT did not consider that he had brought about the loss of tax as he had not authorised the tax returns himself. However, the FTT had little doubt that the company had acted deliberately. A competent tax agent would have known that expenses relating to meals could not be claimed. The company did not appear to have any rationale for the amounts claimed. Expressing a great deal of sympathy for the courier, the FTT concluded that all the discovery assessments were valid and dismissed the appeal.