Grangewood Enterprises Ltd and another v HMRC [2021] UKFTT 323 (TC) (7 September 2021) concerns a penalty imposed for potential lost revenue. The FTT held that the taxpayer was subject to the penalty for deliberate inaccuracy on the grounds that it consciously or intentionally chose not to find out the correct position.
Mr M was the sole director and shareholder of Grangewood Ltd. By the end of the September 2015 accounting period the director’s loan account was overdrawn by £2.9m and the company had paid tax of £704 000. For the accounting period ended 30 September 2016 Mr M withdrew a further £379 641 which gave rise to a tax charge of £103 472. The accounts for that period showed Mr M had transferred an intangible asset valued at £4m to the company which brought the director’s loan account into credit. As a result the company claimed...
