Penalties for inaccuracies in return

The taxpayers were involved in a property development business in Poland. They claimed relief in their UK tax returns for losses incurred with the business. HMRC considered a company controlled by the taxpayers but incorporated in Poland incurred the losses and refused the claim. It imposed penalties for careless inaccuracies in the taxpayers’ returns.

The First-tier Tribunal dismissed their appeal.

The taxpayers were represented at the hearing by their accountant Mr Weissbraun. He acknowledged he was not an experienced litigator but specialised in giving tax advice.

Shortly before the First-tier Tribunal hearing HMRC amended its statement of case on penalties. The taxpayers were given the opportunity to object but they chose not to. Further Mr Weissbraun asked to give oral evidence during the hearing that would confirm the taxpayers ran a partnership and that the company held its assets on trust for the taxpayers. However...