Catherine Grainne Martin v HMRC

In Catherine Grainne Martin v HMRC [2014] UKFTT 1021 (10 November 2014) the FTT found that a 40% penalty was due as a result of the negligence of the taxpayer in the absence of a reasonable excuse.

Mrs Martin ran a business selling ephemera (including books maps postcards theatre memorabilia and documents) on the internet and via other outlets. HMRC had run an enquiry into Mrs Martin’s 2007/08 return over a period of almost five years. Over that time HMRC had repeatedly reminded the taxpayer that the lack of business records delayed the progress of the enquiry.

One of the key issues was whether she had provided her accountants who had submitted her tax return with ebay and PayPal records evidencing internet sales which doubled her profits and were not recorded in...