HMRC fails to prove negligence in tax planning scheme

Mr and Mrs Gardiner entered into a tax planning scheme, later accepted that it did not work and paid all the tax properly due. HMRC imposed penalties on the basis that Mr and Mrs Gardiner has been negligent in claiming the tax relief at the time. However, Mr and Mrs Gardiner denied this.

HMRC pursued the claim for penalties but lost as it failed to produce any witness evidence in support – bearing in mind the onus is on HMRC to prove negligence.

The penalties have been quashed and HMRC must now pay Mr and Mrs Gardiner’s legal costs for defending this claim.

Nick Palmer is a lawyer at Barker Gotelee, Solicitors in Ipswich.

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