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Udlaw Ltd v HMRC

In Udlaw Ltd v HMRC [2020] UKFTT 0052 (TC) (27 January 2020) the FTT found that the appellant had taken reasonable care in completing its returns and therefore was not liable to a penalty.

The appellant’s returns were completed by a self-employed bookkeeper; it was subsequently the responsibility of a firm of accountants to reconcile the VAT returns to the appellant’s bank account and its annual accounts (although in the year in question it failed to do so). The under-declaration arose because a deduction from VATable turnover of 20% was made to pay agency fees. This deduction had been identified by neither the bookkeeper nor the accountants for several years.

HMRC considered that the appellant had not taken ‘reasonable care’ in completing its returns; it had relied too heavily on its bookkeeper and accountants. The FTT considered however that ‘reasonable care’ had to be interpreted in the light of...

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