Tax Appeal and Disclosure Case Studies

Note: Client Confidentiality

We never publish any case studies without the prior express consent of our clients. In the cases below, information such as names, occupations and places have been changed to ensure anonymity. The facts regarding monetary amounts and outcomes are completely accurate and remain unchanged.

First Tier Tax Tribunal Appeal Case Study

Mrs Jenkins – North Yorkshire 

Background: Mrs Jenkins made a capital gain of £900,000 which was omitted from her self-assessment tax return for the applicable year. HMRC deemed this to be a deliberate action and attributed a penalty level to reflect this – £36,000.

Our Representation: We advised Mrs Jenkins to appeal the decision at First Tier Tax Tribunal. We were successful in arguing that, due to several mitigating factors, Mrs Jenkins behaviour was ‘careless’ – attracting a lower penalty level.

Outcome: Mrs Jenkins penalty was reduced to £13,000, saving Mrs Jenkins over £23,000.

COP9 Disclosure/CDF Case Study

Mr Singh – North London 

Background: Mr Singh runs a successful restaurant business in North London. Mr Singh had deliberately under declared his earnings for a period of 5 years, resulting in a significant amount of money being owed to HMRC. Mr Singh wanted to correct his tax affairs but was extremely concerned about criminal prosecution.

Our Representation: We were able to offer Mr Singh guaranteed and complete immunity from criminal prosecution by securing him a disclosure under Code of Practice 9 (also known as the Contract Disclosure Facility).

Outcome: T M Sterling completed the entire disclosure report on Mr Singh’s behalf, using information and records provided by him. Mr Singh was never required to meet with HMRC and simply ‘signed off’ the report at the end of the process. The level of efficiency and cooperation demonstrated throughout the disclosure process meant that Mr Singh’s case attracted the lowest possible penalty level in a COP9 situation.

First Tier Tax Tribunal Appeal Case Study

Mr Barrington – South Wales 

Background: Mr Barrington owns a small building company with his wife. HMRC opened an enquiry into Mr Barrington’s tax affairs. Subsequently, HMRC identified amounts in Mr Barrington’s personal bank accounts that it wrongly suggested were undeclared income. HMRC raised ‘assessments’ relating to 4 years, totalling £80,000.

Our Representation: We talked Mr Barrington through the various HMRC and Tribunal appeals processes. T M Sterling undertook the management of the HMRC appeals and filed a further appeal with the First Tier Tax Tribunal.

Outcome: To date, 3 of the 4 years assessed have been completely overturned without even needing to progress matters to First Tier Tax Tribunal. The fourth year is currently the subject of a Tribunal appeal and is to be heard late in 2018. T M Sterling have currently saved Mr Barrington approximately £60,000.

HMRC Independent Review Case Study

Mrs Ahmed – South Devon 

Background: Mrs Ahmed is a self-employed consultant, alongside her day job in sports management. Following a tax investigation, HMRC contented that Mrs Ahmed in fact earned much more than was declared on her self-assessment tax return. HMRC raised tax assessments totalling £200,000.

Our Representation: T M Sterling analysed Mrs Ahmed’s bank accounts, work arrangements and the amount of earnings HMRC alleged had been underdeclared. It became apparent that to be able to earn the amounts alleged by HMRC Mrs Ahmed would need to work 20 hours per day, 7 days a week. Clearly, HMRC were unreasonable in their assessments.

Outcome: T M Sterling immediately filed an appeal with the First Tier Tax Tribunal and started building a case. However, before getting a chance to present the case, HMRC dropped all allegations and cancelled the £200,000 worth of tax assessments.