No credible evidence

The taxpayer submitted self assessment tax returns for the years 2000/01 to 2003/04 in January 2005 showing income from a property development business.

He declared a substantial amount of turnover for each year against which he claimed expenses leaving a small taxable profit.

HMRC enquired into the returns. The taxpayer was unable to verify the turnover or expenditure and the Revenue concluded he was a jobbing builder rather than a property developer.

The department closed the enquiry in 2007 leaving the figures for turnover as stated by the taxpayer but disallowing the expenses claims.

The taxpayer’s accountant sent a letter to the taxman explaining that the taxpayer had never been a property developer: the information in the returns had been a fabrication made to obtain a bank loan.

HMRC asked for bank statements and credit card statements which the taxpayer provided. The department...