04 October 2021
HMRC v Mattu; (UT)
The Commissioners for HM Revenue and Customs v Sukhdev Mattu  UKUT 0245 (TCC)
HMRC applied to the Upper Tribunal for a tax-related penalty under paragraph 50 Schedule 36 Finance Act 2008 due to the taxpayer’s continuing failure to comply with an information notice. The taxpayer contended that none of the statutory conditions for issuing a penalty were satisfied and that the Tribunal should decline to impose a penalty at all. The Upper Tribunal held that all of the statutory conditions were satisfied, in particular:
(1) There was no existing appeal before the First-tier Tribunal challenging the original penalty imposed (under paragraph 39 of Schedule 36) for failure to comply with the information notice;
(2) The information and documents sought by HMRC were within the possession or power of the taxpayer and therefore there was a continuing failure to comply with the information notice;
(3) HMRC had reason to believe that, as a result of the failure or obstruction, the amount of tax that the taxpayer has paid, or was likely to pay, was significantly less than it would otherwise have been, in particular due to the application of the Transfer of Assets Abroad regime, the Settlements legislation and section 87 TCGA 1992.
Applying a discount to the tax at risk and taking into account mitigating circumstances, the Upper Tribunal decided to impose a penalty of £350,000.
You can read the judgment here.