Protection payments were no excuse for fraudulent behaviour

After an investigation into the taxpayer’s tax affairs HMRC issued assessments for multiple years to income tax PAYE National Insurance contributions and VAT together with associated penalties. The taxpayer appealed.

The First-tier Tribunal did not accept the taxpayer’s assertion that he had relied on third parties and that the inaccuracies were inadvertent. However two other grounds of appeal were also notable.

The taxpayer said that the inaccuracies in his returns resulted from his having acted as an informant to Customs and Excise at Belfast docks. His identity has subsequently been exposed and as a result he had been compelled to make protection payments and had to conceal his income and divert the hidden monies to meet the payments. The judges said the taxpayer had raised his informant activities only at a late stage of the investigation and there was no corroborative evidence. Indeed ...