In Servbet v HMRC [2015] UKFTT 130 (19 March 2015) the FTT reduced a penalty imposed by HMRC.
HMRC had imposed a penalty for an error in a VAT return. There were two issues: whether the error was ‘deliberate and concealed’ or just ‘careless’; and whether the quality of the taxpayer’s disclosure warranted a further reduction to the penalty (FA 2007 Sch 24).
The FTT found that the error had been careless rather than deliberate and concealed. Key to this finding was an invoice which had been included in the return and which HMRC claimed was false. The FTT found that it had not been established that the director of Servbet had been aware of the fact that the invoice was only an estimate when completing the VAT return. However the FTT also noted that the director should have made some enquiries given the unusual...
