Failure to take reasonable care

The taxpayer worked in social services as an employee. He discovered as a result of emails with his trade union that he was entitled to claim expenses and asked a tax agent to check his eligibility.

He gave his P60s to his agent who then submitted self-assessment tax returns for the taxpayer claiming travel and subsistence expenses and professional fees for the tax years 2013-14 to 2017-18. For the first four returns the taxpayer claimed to have been self-employed and that a trading loss arose in each year which was set off sideways against his employment income.

HMRC raised discovery assessments to recover the repayments made due to errors in the returns. It also imposed penalties for inaccuracies.

The taxpayer appealed against the penalties but not against the assessments.

The First-tier Tribunal found that the taxpayer had not taken reasonable care. A reasonable taxpayer engaging an agent would have...