Tax, or divorce legal fees?

The taxpayer was a practising solicitor. He filed his 2007/08 tax return on time but failed to make a timely balancing payment for the year. HMRC assessed a surcharge on the amount against which the taxpayer appealed claiming reasonable excuse for non-payment of the tax.

In 2008 the taxpayer’s wife announced she wanted a divorce. He lost daily contact with his children and divorce proceedings began in July that year. He instructed solicitors and counsel and incurred substantial fees.

The taxpayer said he became aware that he would not be able to pay both the divorce lawyers’ fees and the balancing payment of tax but decided the former were most pressing. He chose not to take a loan to pay the tax because he was ‘averse to borrowing’.

The First-tier Tribunal accepted that the divorce proceedings had upset the taxpayer but not...