Taxpayer failed to take reasonable care

The taxpayer was an employee working in IT until 2013 when he left his employer to go out on his own as an IT consultant. An organisation CR supplied his services to an end user and invoiced that end user on a daily basis. It then paid the money – less its commission - to another organisation (BFB). BFB paid the taxpayer less its commission. The taxpayer understood that BFB would deduct PAYE and National Insurance before paying him although it turned out this did not happen.

The taxpayer also received payments in respect of his services from Atlas Trustees Ltd but it too failed to deduct PAYE and National Insurance.

His tax return for 2013-14 which was prepared by his adviser B2B included income from his employment but none from BFB and Atlas.

After an enquiry HMRC concluded that additional tax...