The First-tier Tribunal (Tax) (FTT), in the case of Merrie  TC 06103, recently dismissed an appeal made by the taxpayer against a penalty.
The penalty was issued in respect of a failure to correctly disclose a capital gain realised by the taxpayer on the sale of his business.
The tribunal ruled that a misunderstanding on the part of the taxpayer of advice and guidance concerning reporting requirements, as published by HMRC, did not prevent the taxpayer being issued with a penalty that was valid.
The taxpayer had made a gain of just under £10m. However, rather than seeking advice from a professional in order to correctly report the gain, he relied instead on guidance from HMRC which he, unfortunately, misunderstood. The costly result was a penalty of £95,000, which the FTT upheld.
Always seek professional advice
To avoid the ‘taxman gift that keeps on giving’, we strongly recommend that you always seek professional advice when completing your tax return. Whilst it may seem to save you fees in the short-term the costs of even simple errors can be large.