This week’s opinion

A recent First-tier Tribunal case S Singh (TC4919) has given us some useful reminders about the operation of penalties.

The taxpayer’s returns contained inaccurate figures for travel expenses. He appealed against a penalty on the grounds that ‘he was not involved in the tax returns’ and his previous adviser calculated all of the estimated expenses without his knowledge or involvement.

Not surprisingly the tribunal did not accept this as a defence. It reiterated the principle that when an accountant is acting as the taxpayer’s agent the taxpayer is still responsible for inaccuracies in the return and cannot pass the blame on to the accountant. This is in contrast to cases when the accountant is engaged to provide advice. If the advice is wrong and leads to inaccuracies in the return the taxpayer may be able to demonstrate that he took reasonable care and thus escape...