Tax planning and penalties

HMRC has been seeking penalties in tax planning cases, where it believes implementation was so flawed that the taxpayers could not have reasonably believed their returns were correct. This is despite the taxpayers having been professionally advised. In several instances, and perhaps many more, HMRC’s approach was itself flawed; for example, it tried to reverse the onus of proof and did not bring evidence to prove its case. There is also a concern that penalty determinations might not have been authorised by the correct grade of officer. The benefit of engaging counsel for tribunal hearings is evident: in two of these penalty cases, HMRC was defeated; and in one it was found to have acted unreasonably.