Loss set-off

The taxpayer carried on two trades: he was involved in a farming partnership and ran a haulage business. His tax return for 2010/11 showed a liability of £6 331. The amount remained unpaid on 2 March 2012 leading HMRC to levy a 5% penalty of £316.

The taxpayer’s accountant said he had written to the Revenue on 24 January 2012 to tell the department a loss had arisen in 2011/12 meaning would not be settling the 2010/11 liability or the 2011/12 payments on account.

HMRC refused to waive the fine and the taxpayer appealed.

The First-tier Tribunal noted TMA 1970 s 42(1A) required that a carry back claim had to be “quantified at the time when the claim is made” – which the accountant argued was the effect of his letter of 24 January.

Only a simple calculation was required he said and there...