In Timothy Harding v HMRC (FTC/56/2013 – 15 November 2013) the taxpayer had received a ‘severance payment’ as compensation for the early termination of his employment but had failed to record it in his self-assessment return. Although he now accepted that the payment was subject to income tax he argued that he should not have been imposed a penalty for careless inaccuracy under FA 2007 Sch 24.
The appellant alleged that at the time of filing his return he had reasonable grounds to believe that the payment was not taxable. The compromise agreement duly recorded that it was the understanding of the parties that the payment was not subject to tax and he had read an article on the Wolters Kluwer website confirming that no tax was payable on such a severance payment.
The Upper Tribunal dismissed the appeal noting that the taxpayer...
