Case Number: TC09775
[By remote video/telephone hearing]
Appeal reference: TC/2024/4209
Discovery assessment – s29(4) TMA – s336, s337 and s338 ITEPA – appeal dismissed
Judgment date: 5 February 2026
Before
TRIBUNAL JUDGE ROSA PETTIFER
Between
FRANCIS UZOH
Appellant
and
THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS
Respondents
Representation:
For the Appellant: The Appellant represented himself
For the Respondents: Ms Victoria Halfpenny litigator of HM Revenue and Customs’ Solicitor’s Office
DECISION
Introduction
With the consent of the parties, the form of the hearing was V (video). Myself, the Appellant, Ms Victoria Halfpenny a litigator for HMRC, Mr Matthew Bucknell an officer of HMRC and the witness for HMRC and Mr Alex Goh an observer from HMRC attended via Microsoft Teams. A face to face hearing was not held because it was not expedient to do so. The documents to which I was referred were a documents bundle of 302 pages prepared by HMRC, the Appellant’s bundle which was in the form of a skeleton argument of 4 pages (which I refer to as the Appellant’s skeleton argument) and an authorities bundle of 312 pages.
Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearing remotely in order to observe the proceedings. As such, the hearing was held in public.
For the reasons set out below I dismiss the appeal.
background
The Appellant appeals against four discovery assessments issued by HMRC pursuant to s29 Taxes Management Act 1970 (“TMA”).
The details of the discovery assessments are set out below:
Tax year | Type of decision | Date of decision | Amount |
2017/18 | Discovery Assessment | 5 March 2024 | £1,124.80 |
2019/20 | Discovery Assessment | 5 March 2024 | £1,097.00 |
2020/21 | Discovery Assessment | 5 March 2024 | £861.80 |
2021/22 | Discovery Assessment | 5 March 2024 | £1,352.80 |
TOTAL = £4,436.40 |
I refer to the tax years listed above collectively as the “Relevant Years” and the assessments as the “Discovery Assessments”.
The Appellant now appeals against the Discovery Assessments. The grounds that the Appellant relies on are summarised as follows:
That the statutory conditions for making a discovery assessment are not met, in particular: there was no loss of tax; there was no discovery by HMRC; and the Appellant was not careless.
That he should not have to repay any money retained by his advisor.
That the penalties should be mitigated.
That no interest should be charged.
the law
Discovery assessments
S29 TMA provides in relevant part:
If an officer of the Board or the Board discover, as regards any person (the taxpayer) and a year of assessment—
that any income which ought to have been assessed to income tax, or chargeable gains which ought to have been assessed to capital gains tax, have not been assessed, or
that an assessment to tax is or has become insufficient, or
that any relief which has been given is or has become excessive,
the officer or, as the case may be, the Board may, subject to subsections (2) and (3) below, make an assessment in the amount, or the further amount, which ought in his or their opinion to be charged in order to make good to the Crown the loss of tax.
…….
in respect of the year of assessment mentioned in that subsection; and
in the same capacity as that in which he made and delivered the return,
unless one of the two conditions mentioned below is fulfilled.
The first condition is that the situation mentioned in subsection (1) above was brought about carelessly or deliberately by the taxpayer or a person acting on his behalf.
The second condition is that at the time when an officer of the Board—
informed the taxpayer that he had completed his enquiries into that return,
the officer could not have been reasonably expected, on the basis of the information made available to him before that time, to be aware of the situation mentioned in subsection (1) above.
For the purposes of subsection (5) above, information is made available to an officer of the Board if—
it is contained in any claim made as regards the relevant year of assessment by the taxpayer acting in the same capacity as that in which he made the return, or in any accounts, statements or documents accompanying any such claim;
it is contained in any documents, accounts or particulars which, for the purposes of any enquiries into the return or any such claim by an officer of the Board, are produced or furnished by the taxpayer to the officer; or
it is information the existence of which, and the relevance of which as regards the situation mentioned in subsection (1) above—
could reasonably be expected to be inferred by an officer of the Board from information falling within paragraphs (a) to (c) above; or
are notified in writing by the taxpayer to an officer of the Board.
In subsection (6) above—
any reference to the taxpayer’s return under section 8 or 8A of this Act in respect of the relevant year of assessment includes—
a reference to any return of his under that section for either of the two immediately preceding year of assessments;
…….
where the return is under section 8 and the taxpayer carries on trade, profession or business in partnership, a reference to any partnership return with respect to the partnership for the relevant year of assessment or either of those periods; and
any reference in paragraphs (b) to (d) to the taxpayer includes a reference to a person acting on his behalf.
…….
Any reference in this section to the relevant year of assessment is a reference to—
in the case of the situation mentioned in paragraph (a) or (b) of subsection (1) above, the year of assessment mentioned in that subsection; and
in the case of the situation mentioned in paragraph (c) of that subsection, the year of assessment in respect of which the claim was made.
S34 TMA provides that the ordinary time limit for a discovery assessment is not more than fours years after the end of the year of assessment to which it relates.
S36 TMA relevantly provides:
An assessment on a person in a case involving a loss of income tax or capital gains tax brought about carelessly by the person may be made at any time not more than 6 years after the end of the year of assessment to which it relates (subject to subsection (1A) and any other provision of the Taxes Acts allowing a longer period).
……
In subsections (1) and (1A) references to a loss brought about by the person who is the subject of the assessment include a loss brought about by another person acting on behalf of that person.
……
S50(6) TMA provides:
If, on an appeal notified to the tribunal, the tribunal decides—
that, . . ., the appellant is overcharged by a self-assessment;
that, . . ., any amounts contained in a partnership statement are excessive; or
that the appellant is overcharged by an assessment other than a self-assessment,
the assessment or amounts shall be reduced accordingly, but otherwise the assessment or statement shall stand good.
S118 TMA provides:
For the purposes of this Act a loss of tax or a situation is brought about carelessly by a person if the person fails to take reasonable care to avoid bringing about that loss or situation.
Expenses
The Income Tax (Earnings and Pensions) Act 2003 (“ITEPA”) provides:
336 Deductions for expenses: the general rule
The general rule is that a deduction from earnings is allowed for an amount if—
the employee is obliged to incur and pay it as holder of the employment, and
the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment.
The following provisions of this Chapter contain additional rules allowing deductions for particular kinds of expenses and rules preventing particular kinds of deductions.
No deduction is allowed under this section for an amount that is deductible under sections 337 to 342 (travel expenses).
337 Travel in performance of duties
A deduction from earnings is allowed for travel expenses if—
the employee is obliged to incur and pay them as holder of the employment, and
the expenses are necessarily incurred on travelling in the performance of the duties of the employment.
This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).
338 Travel for necessary attendance
A deduction from earnings is allowed for travel expenses if—
the employee is obliged to incur and pay them as holder of the employment, and
the expenses are attributable to the employee’s necessary attendance at any place in the performance of the duties of the employment.
Subsection (1) does not apply to the expenses of ordinary commuting or travel between any two places that is for practical purposes substantially ordinary commuting.
In this section “ordinary commuting” means travel between—
the employee’s home and a permanent workplace, or
a place that is not a workplace and a permanent workplace.
Subsection (1) does not apply to the expenses of private travel or travel between any two places that is for practical purposes substantially private travel.
In subsection (4) “private travel” means travel between—
the employee’s home and a place that is not a workplace, or
two places neither of which is a workplace.
This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).
S339 ITEPA sets out the meaning of “workplace” and “temporary workplace”.
issues, burden and standard of proof
The issues to be determined
The issues to be determined and relevant burdens of proof are:
Whether the Appellant was entitled to ‘deductions’ pursuant s336, s337 and s338 ITEPA. If he was then there is no insufficiency of tax. The Appellant bears this burden of proof.
Whether HMRC made a discovery, see s29(1) TMA. HMRC bear this burden of proof.
The standard of proof on all issues is the balance of probabilities.
The issues not to be determined
Penalties
The Appellant’s skeleton argument made several submissions about penalties. However, the papers for the hearing did not include any penalty decision letters. In addition HMRC confirmed during the hearing that no behavioural penalties had been issued and the late payment penalties had been waived. Therefore, with the agreement of the parties, the hearing proceeded on the basis that the appeal was only against the Discovery Assessments.
No statutory right of appeal
The First-tier Tribunal was established by statute. Therefore, in order to bring an appeal against a certain issue to the First-tier Tribunal such a right of appeal must be granted by statute: these are referred to as statutory rights of appeal.
On the facts of this appeal there is no statutory right of appeal to the First-tier Tribunal in respect of:
Interest; or
Whether or not HMRC should waive collection of tax due because it was not paid to the Appellant (see below).
Consequently, I do not make any decision about either of these issues.
the facts
I heard oral evidence from the Appellant and Officer Bucknell who were both cross-examined, but whose evidence for the most part was unchallenged. Both the Appellant and Officer Bucknell answered questions in a straightforward manner. I found both witnesses to be honest and credible.
I set out the majority of my findings of fact in this part of my decision. A lot of my findings of fact are from the documents supplied or the largely unchallenged evidence of the Appellant and Officer Bucknell. Consequently, most of them require no discussion as they were not in dispute. However, where they were in dispute or require some discussion I provide the reasons for my findings below. I have also incorporated the Appellant’s and Officer Bucknell’s evidence in the findings of fact below rather than setting out the evidence provided.
Timeline
Throughout the Relevant Years the Appellant was employed in various roles. The Appellant’s income tax was accounted through PAYE.
On 22 June 2021 the Appellant contacted HMRC and told them he wanted to enrol onto the self-assessment system as he had expenses that exceeded £2,500.
The Appellant put all the information for his self-assessment tax returns for the years 2017/18, 2019/20, 2020/21 and 2021/22 (the “Relevant Returns”) into the Tommy’s Tax app (the “App”). The information the Appellant put into the App was based on actual receipts.
On 21 July 2021 on behalf of the Appellant Tommy’s Tax submitted self-assessment tax returns for the years:
2017/18;
2019/20; and
2020/21.
On 6 September 2022 on behalf of the Appellant Tommy’s Tax submitted a self-assessment tax return for the year 2021/22.
The Relevant Returns included claims for business travel and subsistence expenses, as follows:
Tax year | Income | Expenses claims |
2017/18 | £28,077 | £5,618 |
2019/20 | £27,445 | £5,490 |
2020/21 | £40,083 | £4,317 |
2021/22 | £51,833 | £1,400 |
(the “Claims”).
The Appellant did not see what was in any of the Relevant Returns but his belief was that Tommy’s Tax were only making claims (for business travel and subsistence expenses) that he was entitled to make.
The entries in the Relevant Returns generated a repayment sum to the Appellant of £3,412.40. £3,254.54 was repaid to Tommy’s Tax for the years 2017/18, 2019/20 and 2020/21. On 21 September 2021 the Appellant received £2,091.41 from Tommy’s Tax. Therefore, Tommy’s Tax retained £1,163.13.
Between September 2021 and October 2023, the Appellant contacted HMRC to chase the repayment for 2021/22.
On 14 November 2023 Officer Bucknell became involved with the Relevant Returns when he was asked to complete a background report. The Appellant had raised a complaint with his MP in relation to a pending repayment for 2021/22.
On 15 December 2023 Officer Bucknall wrote to the Appellant. That letter stated:
I believe that your tax returns for the [Relevant Years] above are wrong. This is because you have claimed job-related expenses which you may not be entitled to. Any expenses claimed must be allowable under Section 336 Income Tax (Earnings and Pensions) Act 2003.
On 18 December 2023 the Appellant and Officer Bucknell spoke and Officer Bucknell requested documentation relied on to substantiate the Claims.
On 13 February 2024 the Appellant sent Officer Bucknell his records to review. These consisted of screen shots of the Tommy’s Tax app for the years 2019/20, 2020/21 and bank statements showing a number of contactless card payments to TFL (but with no detail about where those journeys were to and from) (the “Bank Statements”).
Consequently, on 5 March 2024 Officer Bucknell wrote to the Appellant as follows:
After reviewing the documents you sent to me, I have come to the conclusion that these do not fully support your employment expense claims. This is because they are contactless payments for Transport for London and these could have been for any kind of travel not wholly and exclusively for business purposes. There is also no evidence to say if your employer has reimbursed you for any or all of this travel.
The following letters will explain the actions I have taken in making assessments to recover the amount of tax that I think you owe.
On this occasion I have decided not to charge you any penalties as you have confirmed that you relied on your agent at the time to complete your self-assessment tax returns on your behalf.
Also on 5 March 2024 Officer Bucknell issued the Discovery Assessments.
On 11 March 2024 the Appellant provided the Respondents with a spreadsheet which for the years stated as 2018, 2019 and 2020 in the distance column provide SE6 1AU as a starting postcode (the “Spreadsheet”). The distance column is not complete for years stated as 2021 and 2022.
On 3 April 2024, following a request from the Appellant HMRC issued their ‘view of the matter’ which agreed with the Discovery Assessments. The Appellant subsequently requested a review.
On 1 July 2024 HMRC wrote to the Appellant with the outcome of their review, upholding the Discovery Assessments (the “Review Letter”). Having referred to the Spreadsheet the Review Letter says:
Having reviewed HMRC records, I note that the address for SE6 1AU was your previous place of residence, therefore, this would be classed as ordinary commuting, which is not an allowable expense under Section 338 ITEPA 2003.
On 26 July 2024 the Appellant appealed the Discovery Assessments to the First-tier Tribunal.
The Appellant’s self-assessment tax return for 2022/23 does not contain a claim for any expenses.
Tommy’s Tax
The Appellant’s evidence in relation to Tommy’s Tax which I accept was:
He first heard of Tommy’s Tax through a friend. The friend had used Tommy’s Tax to do a ‘tax return’. Everything had gone well for the friend and there had been no issues. The Appellant also reviewed the Tommy’s Tax website and noted the testimonials.
He made the Claims entirely in reliance on Tommy’s Tax: having explained to Tommy’s Tax who he was, what he was doing and where he was travelling to and from. Tommy’s Tax had assured him that what he was doing was right and correct. He believed that any mistakes in the Claims were down to Tommy’s Tax’s interpretation of the rules.
He provided all the information that Tommy’s Tax asked him to provide through the App.
He had only provided true and accurate information to Tommy’s Tax.
The Appellant did not see the Relevant Returns before they were submitted.
It was after contact with HMRC that he first thought that perhaps something was not right. It is no longer possible to contact Tommy’s Tax. Additionally, the Tommy’s Tax website is down and the App has been deleted.
He believed that Tommy’s Tax were legitimate as HMRC were prepared to deal with them.
Were the Claims inflated?
The Appellant’s Grounds for Appeal included the following:
Incorrect estimation advice: I was advised that inflating my estimated expenses would result in larger returns. As someone not well-versed in UK tax regulations, this advice appeared legitimate but was fundamentally flawed. (Evidence provided)
Inflated expense claims: Tommy’s Tax inflated the expenses on my form to secure larger returns from HMRC. The expenses submitted were not reflective of my actual costs. I originally submitted reasonable expenses, but Tommy’s Tax came back to me insisting that HMRC required higher figures and advised me to increase them.
[Underlining added.]
Part of HMRC’s case was that the Claims were not entirely based on real figures ie they were inflated. Put another way HMRC seek to rely on the fact that the Claims were inflated. HMRC sought to make good what the Appellant, a litigant in person, appeared to concede in his Grounds for Appeal by putting the references to inflation in the Grounds for Appeal to the Appellant. He said that he had had no intention of misleading HMRC and had submitted true and accurate information to Tommy’s Tax. The Appellant also said that when Tommy’s Tax had increased his claims he had understood that this was in line with what was allowed based on the information he had provided to them. HMRC did not press the Appellant further about whether he accepted that the Claims were inflated or not. Therefore, the Appellant’s position on this point was unclear. Despite it being a relatively easy but time consuming exercise, HMRC did not compare the evidence the Appellant submitted (in early 2024) to support the Claims to demonstrate whether the Claims were in fact inflated. Therefore, I am not satisfied, on the balance of probabilities, that the Claims were inflated. So HMRC’s points on reliance on this fact can go no further.
the arguments
I am grateful to the Appellant and Ms Halfpenny for their submissions, and willingness to engage with my questions. I have set out a summary of those submissions on the law and the facts. Because I do not deal specifically with any point that does not mean that it was not considered in the round when reaching my decision.
HMRC’s case
HMRC say that the Claims are not allowable because primarily they are ‘ordinary commuting’ expenses. Therefore, there is an insufficiency of tax.
HMRC say that the other conditions for a discovery assessment are met: Officer Bucknell made a discovery; and the Appellant was careless because the failings of his advisor should be attributed to him.
The Appellant’s case
The Appellant says that the Claims were allowable because some of the relevant journeys involved travel to temporary workplaces.
The Appellant says that the other statutory conditions for making a discovery assessment are not met, in particular: there was no discovery by Officer Bucknell; and the Appellant was not careless because he relied on his advisor who misinterpreted the law (and there was no factual misrepresentation by the Appellant).
I explain above why I do not deal with other issues raised by the Appellant. See below in relation to s29(5) TMA.
discussion and findings
The Claims
The Appellant’s Grounds for Appeal, skeleton argument and the submissions he made during the hearing did not focus on whether the Claims were allowable or not. However, when I asked him if accepted that the Claims were not allowable he said he did not and so I address that issue first.
This is a useful juncture to repeat that on this issue the Appellant bears the burden of proof. The Appellant’s evidence consisted of:
a simple statement made in oral evidence that some of the journeys he incurred were to temporary workplaces;
the Bank Statements; and
the Spreadsheet.
Each of s336, s337 and s338 ITEPA have particular requirements that must be met for a deduction/claim under that section to be allowed. See s336(1)(a) and s336(1)(b), s337(1)(a) and s337(1)(b), and s338(1)(a) and s338(1)(b) ITEPA above. The evidence that the Appellant has provided is not sufficient to persuade me that the Claims meet those requirements. First there is no evidence at all, nor was there any explanation offered, that the Appellant was obliged to incur and pay [the fares] as holder of the employment, see s336(1)(a), s337(1)(a) and s338(1)(a) ITEPA. Nor is there any evidence at all, nor was there any explanation offered, that the Appellant [incurred the fares] in the performance of the duties of employment, see s336(1)(b) and, s337(1)(b) ITEPA. Finally, s338 ITEPA is not available where the travel is ordinary commuting which includes between home and a permanent workplace. The Spreadsheet indicates that the Appellant’s journeys were from his home. The Appellant did say in oral evidence that some of his journeys were to temporary workplaces. However, this was not supported by any documentary evidence (the Bank Statements do not provide sufficient detail), nor any detailed oral evidence. For example, where the temporary workplaces were or why they were temporary workplaces and not permanent workplaces. In light of the forgoing I find that the Claims were not allowable under any of s336, s337 and s338 ITEPA.
The conditions for a discovery assessment
Discovery – s29(1) TMA
S29(1) TMA requires, on the facts of this case, Officer Bucknell to have discovered that the Claims were not allowable ie that the relief which had been given is or has become excessive. HMRC bears the burden on this issue.
The Upper Tribunal case of Anderson v HMRC [2018] UKUT 0159 (TCC) (“Anderson”) summarises the law and case law on discovery:
……
We consider that the following propositions are now established by the various authorities:
s 29(1) refers to an officer (or the Board) discovering an insufficiency of tax;
the concept of an officer discovering something involves, in the first place, an actual officer having a particular state of mind in relation to the relevant matter; this involves the application of a subjective test;
the concept of an officer discovering something involves, in the second place, the officer’s state of mind satisfying some objective criterion; this involves the application of an objective test;
if the officer’s state of mind does not satisfy the relevant subjective test and the relevant objective test, then the officer’s state of mind is insufficient for there to be a discovery for the purposes of subsection (1);
s 29(1) also refers to the opinion of the officer as to what ought to be charged to make good the loss of tax; accordingly, the officer has to form a relevant opinion and such an opinion has to satisfy some objective criterion;
……
The officer’s decision to make a discovery assessment is an administrative decision. We consider that the objective controls on the decision making of the officer should be expressed by reference to public law concepts. Accordingly, as regards the requirement for the action to be “reasonable”, this should be expressed as a requirement that the officer’s belief is one which a reasonable officer could form. It is not for a tribunal hearing an appeal in relation to a discovery assessment to form its own belief on the information available to the officer and then to conclude, if it forms a different belief, that the officer’s belief was not reasonable.
HMRC say that Officer Bucknell made the requisite discovery.
The Appellant says that Officer Bucknell did not make a discovery. The Appellant relies on a number of cases in support of this argument, as follows:
The Appellant says that new information is required in order for there to be a discovery: this is not correct, see for example Hankinson v Revenue & Customs Commissioners [2011] EWCA Civ 1566 at [15].
The Appellant relies on Kelly v HMRC [2021] UKFTT 162 (TC)but the facts of this case are materially different from the Appellant’s case and so it does not assist the Appellant. In that case the First-tier Tribunal found that later assessments had not been validly issued because s29 TMA could not be used on two separate occasions to raise assessments based on the same discovery. HMRC have not attempted to do that in this appeal.
The Appellant also sought to rely on Langham v Veltema [2004] EWCA Civ 193 (“Langham v Veltema”) for the proposition that a discovery requires new or previously undisclosed information. That is not a principle that can be drawn from this case which was about the requirements of s29(5) and not s29(1) TMA. See Langham v Veltema particularly at [11] where the Court of Appeal sets out the issues in that case.
From my findings of fact above it is clear that on or before 5 March 2024 Officer Bucknell formed the view that the Claims were not allowable and therefore a relief that had been given was or had become excessive and so there was an insufficiency of tax. Therefore, the subjective requirement as explained by the Upper Tribunal in Anderson at [24] is met. In my view, on the basis of the information before Officer Bucknell certainly after the receipt of the documents supplied by the Appellant on 13 February 2024 (which was lacking for the reasons set out above), this was a belief that a reasonable officer could form and so the objective requirement as explained by the Upper Tribunal in Anderson at [24(5)] and [30] is met. Consequently, I am satisfied and find as fact that Officer Bucknell made a discovery as required by s29(1) TMA.
Careless – s29(4) TMA
HMRC bear the burden of establishing that the conditions in s29(4) TMA are met.
I must determine whether the insufficiency of tax generated by the Claims was brought about carelessly by the Appellant. The insufficiency of tax is brought about carelessly by the Appellant if he has failed to take reasonable care to avoid bringing it about. This is an objective test ie what would a reasonable taxpayer do.
Cases considering reliance on an advisor
HMRC sought to rely on Hafeez Katib v HMRC [2019] UKUT 0189 (TCC) (“Katib”) and Chirstopher Ryan v HMRC [2012] UKUT 9 (TCC) (“Ryan”) for the proposition that:
…as it was the Appellant’s own decision to appoint an Agent, he should pursue liability directly against his Agent should he believe that the advice he received from his Agent was inaccurate or that his Agent failed in its duty towards him.
Katib was about bringing an appeal to the First-tier Tribunal outside the statutory time limits ie a late appeal: at [59] Katib the Upper Tribunal is discussing, in this context, the general rule that Mr Katib should bear the consequences of his advisor’s failings. HMRC made no submissions about why or how the general rule in Katib should apply in the context of s29(4) and s118(5) TMA, whose focus is reasonable care and not the exercise of a judicial discretion. Nor did HMRC acknowledge that the rule in Katib is a general one that can have exceptions. Analogous points can be made in relation to Ryan and reasonable excuse. I do not necessarily disagree with the thrust of HMRC’s submission predicated on Katib and Ryan but without more I am not prepared to base my decision on this submission.
The Appellant relied on H & H Contract Scaffolding LTD v HMRC [2024] UKFTT 00151 (TC) (H & H) in support of the proposition that reliance on an advisor would mean that a person was not ‘careless’ as they had taken ‘reasonable care’. Although H & H involved Schedule 24 Finance Act 2007 (“Schedule 24”) penalties (and not s29 TMA discovery assessments) this does not prevent useful analogies being drawn from H & H: the statutory questions both consider careless behaviour and whether someone has failed to take reasonable care. HMRC rightly point out that H & H is a First-tier Tribunal case and is therefore not binding. They also say that H & H turned on the taxpayer providing substantial information in the returns relevant in that appeal.
The Appellant is right that in H & H the First-tier Tribunal found that reliance on an advisor meant that the taxpayer was not careless. However, that case does not provide a general rule that if a taxpayer relies on an adviser they will not be careless. Whether that is the case will depend on the facts of a specific case. H & H does turn on its specific facts (but not in the way that HMRC say). Those facts included that: the taxpayer had set out in some detail why they had considered the advisor in that case to be reputable; that they had checked the advice of the adviser ‘as far as possible’; the area of the law in that case was ‘highly specialised’; and the way in which HMRC had pleaded its case.
The Appellant also relied on Hanson v HMRC [2012] UKFTT 314 (TC). Again this is a First-tier Tribunal case: where the Appellant successfully argued that he was not careless because he relied on his advisor, in the context of Schedule 24; which turns on its facts. Those facts included that: the Appellant and the advisor had instructed accountants who had represented him for many years; and the issue was whether a form of holdover relief was available to mitigate a Capital Gains Tax charge on the disposal of loan notes received following the sale of a business, where UK holiday letting properties were involved ie not a straightforward issue.
In my view a reasonable taxpayer in the Appellant’s position would have done more than wholly rely on the advice from Tommy’s Tax. For example, in circumstances where it is relatively simple to inform oneself within the PAYE context which commuting costs are recoverable as expenses to: at least consult something on the issue including legislation or HMRC guidance; or asking Tommy’s Tax to explain why the expenses were recoverable. The Appellant did neither of these things. Doing so would have prevented the Claims from being made and therefore the insufficiency of tax. Therefore, I am satisfied that the Appellant failed to take reasonable care to avoid bringing about the insufficiency of tax and was thus careless for the purposes of s29(4) TMA.
It is not relevant that the Appellant has made a self-assessment tax return subsequent to the Relevant Years that does not include any claim for expenses.
Made available s29(5) TMA
HMRC’s statement of case referred to s29(5) TMA. However, although some reference was made to s29(5) TMA in response to the Appellant’s case HMRC confirmed during the hearing that their primary case was reliance on s29(4) TMA. Given that I have found for HMRC on the basis of s29(4) TMA I do not go on to consider the arguments made by the parties in relation to s29(5) TMA.
Time limits
I am satisfied that that the Discovery Assessments were made in time pursuant to: s34 TMA for the years 2019/20, 2020/21 and 2021/22; and s36 TMA for the year 2017/18.
conclusion
For the reasons set out above I am satisfied that the insufficiency of tax generated by the Claims was brought about carelessly by the Appellant. Further that there are no procedural defects with the Discovery Assessments. Therefore, I dismiss the appeal.
Right to apply for permission to appeal
This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.
Release date: 05th FEBRUARY 2026