Hansard [2018] TC 06522

The First Tier Tribunal judge ordered for the late filing penalties to be substantially reduced. The case was unusually heard in the absence of the taxpayer and his representative but went mostly in their favour. This case demonstrates the fairness of the justice system where the judges went into some depth to understand the appellants position despite not being present at the hearing.

Woman jailed for VAT fraud

Maureen Carpenter, aged 52 years, has been jailed for eighteen months after a prolonged investigation by HMRC revealed that she had been filing fraudulent VAT returns in relation to Maureen’s son’s company Booze Booze Booze Ltd. Her intention was to avoid the right VAT to HMRC and to pocket the amount saved. Maureen Carpenter was been ordered to £250,000 within 3 months or having to face additional 3 years in jail and still owe the money. Read more..

Tax Appeal Struck Out

Scream Wholesale Ltd [2018] TC 06398

The First Tier Tribunal has decided that the appellant’s appeal should be “struck out” as they failed to comply with the Tribunal’s Directions. The appeal for striking out are usually made by HMRC’s litigation team when the appellant fails to comply with directions. In our view, these mistakes usually made by inexperienced representatives can be very costly to the tax payer.

Cyclops Electronics UT/2016/0193

The Upper Tribunal has decided in favour of HMRC in relation to the multi-million pound tax avoidance scheme promoted by Cyclops Electronics and Graceland Fixing and used by over a hundred other businesses. In summary the businesses involved in the scheme used loan notes to pay bonuses to company directors with a view to avoid paying tax and National Insurance. A number of companies were created to issue the loan notes with special condition and were designed to match the bonuses. The scheme was designed to make use of loopholes in the legislation but these have now been closed. This win by HMRC is expected to collect over £55 million in tax. This was another example of heavily marketed tax avoidance schemes (backed by counsel opinion) that has failed. We have written several times previously about how one should avoid entering into these artificial schemes that are only likely to fail in courts. If you were a victim to this scheme and would like professional help in resolving your position with HMRC, please contact us and we will be happy to help.