Errors were careless, rather than deliberate

In February 2014 HMRC opened an enquiry into the taxpayers’ returns. It requested further information but because the taxpayers failed to provide this the department issued notices under FA 2008 Sch 36. It also issued discovery assessments closure notices and penalties.

The taxpayers who were a company and its director appealed. The director said she was not a tax expert and had relied on her accountant to deal with her tax affairs and those of the company. In brief she claimed she was not responsible for the errors in the returns and HMRC should compel the accountant to carry out its obligations to prepare accurate returns.

The First-tier Tribunal found the director to be generally ‘evasive unreliable and inconsistent’ but also said she appeared not to have ‘any meaningful grasp over the details of her financial and tax affairs’.

The judge said the closure notices...