Unjust imposition

KEY POINTS

• Taxpayer took part in a capital gains tax avoidance scheme.
• Penalty imposed when the scheme failed.
• Was the taxpayer negligent?
• Penalties should not be imposed arbitrarily.

HMRC have done an excellent job in convincing the media that tax avoidance is not only immoral but also illegal. I suspect that if you ask a member of the public they would not know there was a difference between tax avoidance and tax evasion. This becomes particularly important when we consider penalties.

My view of this was recently tested by the First-tier Tribunal where my client appealed against a penalty on the ground that it was unjust. The result not only proved to me that we should continue to defend our clients against unjust penalties it also gave me a glimpse of what may...