In Dr J Kohal v HMRC (TC02870 – 26 September) HMRC formed the opinion that a civil engineer had underdeclared his income by more than £70 000. They issued an amendment to his self-assessment and imposed a penalty under TMA 1970 s 95 at the rate of 60% of the evaded tax. The First-tier Tribunal upheld the penalty in principle but directed that it should be reduced to 45% of the evaded tax. Judge Tildesley observed that ‘the Tribunal is entitled to take an overall view of the appropriate penalty and not obliged to follow HMRC’s approach of giving abatements for various categories of conduct’.
Why it matters: HMRC had been unduly harsh in imposing a penalty at the rate of 60% of the tax lost and reduced it to 45%. The interesting feature of this case is that ...
