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The taxpayer made an error in his 2008/09 self-assessment tax return by claiming exemption from tax on a £30 000 redundancy payment on which relief had already been given through the PAYE system.
Additional tax of £12 000 was due with HMRC levying a penalty of £1 800 on the basis the mistake had been careless.
The taxpayer requested that the penalty be suspended under FA 2007 Sch 24 but the taxman refused on the grounds it was not possible to set a specific condition for the taxpayer to show he would claim the correct reliefs against future redundancy payments.
Nor was it possible to set a generic condition for the taxpayer to ensure the correct amount of tax due be paid during the suspension period.
The First-tier Tribunal found the Revenue's argument was based on an error of law:...
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