Archive for March, 2014

A former window cleaner discovered to his cost that honesty with the tax authorities is the best policy after giving up his round to devote himself to the more lucrative business of trading in collectible American comic books, videos and DVDs. The man was hit with a bill for more than £14,000 in back-tax and penalties after failing to keep adequate business records or to inform HM Revenue and Customs (HMRC) that his source of income had radically changed. He admitted that he had ‘fabricated his source of income’ – having continued to state on tax returns that he worked as a self-employed window cleaner – but nevertheless argued that much of his profit had been derived from selling off his childhood collection of comics and videos, which he valued at £38,000. However, following an in-depth inquiry into his affairs, HMRC pointed ... Read more

A highly successful entrepreneur who incurred a Capital Gains Tax (CGT) liability in excess of £760,000 on the sale of shares in his company has failed to convince the Court of Appeal that an accountancy firm gave him negligent advice. The Iranian-born businessman had established a thriving clothing company after settling in Britain in the 1970s. He had eventually sold his shares in the company for more than £8.5 million, on which CGT of £763,658 was charged. He successfully argued before the High Court that he was potentially entitled to non-domiciled status and thus could have taken advantage of an avoidance scheme which would have extinguished his exposure to CGT. The accountancy firm was found to have been negligent in failing to advise him to seek specialist tax advice. In allowing the firm’s appeal against that decision, the Court found that it ... Read more

In a unique decision which balanced the public interest in naming and shaming tax defaulters against the privacy and reputational rights of the individual, a solicitor accused of under-declaring his liability to pay Stamp Duty on a property purchase has been granted at least temporary anonymity by a tax tribunal. The solicitor and his wife had jointly bought a property for more than £760,000 but had declared the purchase price to HM Revenue and Customs (HMRC) as £100,000. Although more than £30,000 in Stamp Duty was due on the transaction, none was paid until HMRC launched an inquiry. Upon discovery of the default, the couple signed a settlement agreement with HMRC by which they paid the sum due, plus a penalty of more than £16,000. However, when the couple learnt that their names would appear on a list of deliberate defaulters, ... Read more