Lack of accounting records

The taxpayer appealed against a closure notice in respect of an enquiry into his 2014-15 self-assessment return. He was in business as a sole trader providing project and business advisory services. He was based in the UK but his clients were around the world. In a previous decision (TC4898) the tribunal found he carried on two trades – provision of consultancy services and leasing of machinery – so losses from the latter could not be offset against profits of the former. The taxpayer explained that he also ran errands for some clients on a ‘non-profit’ basis to maintain goodwill and enhance the business relationship. He did not include the income or expenditure because the transactions were on an ‘in-out basis’. Further he kept no written records of them.

In addition the taxpayer said because access to international banking services were not widely available in some parts...