A taxpayer has fines of over £1.2m reduced by the Court of Appeal (CoA) to £220k.  The taxpayer, a successful barrister, had been issued information notices by HMRC regarding his income tax returns and an inheritance tax return related to his father’s estate.

Over the course of many years the taxpayer didn’t respond to HMRC’s requests for information and HMRC eventually asked the Upper Tribunal to issue a fine for non-compliance as was permitted under the legislation relating to information notices.  The taxpayer’s behaviour was described as ‘disgraceful’ by a judge in the Upper Tribunal and issued a fine of over £1.2m.  This fine prompted the barrister to pay appropriate attention to his and his father’s estate’s tax affairs.  It took many year of unanswered correspondence to get to this point, along with the barrister not upholding undertakings to the tribunal.

The judges at the CoA agreed that the while the behaviour of the barrister was correctly described by the tribunal judge that his behaviour, while reckless was not deliberate or dishonest and therefore imposing fines at 100% of ‘tax at risk’ was overly harsh.

The CoA remade the earlier decision and substantially reduced the fine.  The fine is still substantial reflective of the barrister ‘disgraceful’ behaviour while the barrister still had to pay the outstanding tax and interest on the late paid amounts.

The decision can be found at: Tager & Anor v Revenue And Customs – Find case law (nationalarchives.gov.uk)

This case highlights that substantial fines can be levied by the courts where taxpayers do not comply with information notices.

Please do contact us if you have received an information notice from HMRC or your tax affairs are under enquiry.  We can help you negotiate with HMRC and advise on appropriate administrative systems to enable easy response enquiries.