Appeals, disputes and investigations

Discovery assessment on undeclared income held offshore

The First-tier Tribunal (FTT) has upheld assessments on a taxpayer who moved undeclared income offshore, finding that HMRC had validly raised the assessments and penalties.

HMRC raised assessments and penalties on a taxpayer who ran a property management business, initially as an individual then incorporated. It alleged that he had not accounted for all his trading income before incorporation, and had then run an off-record trade alongside his company. The taxpayer had claimed that the funds held in his Isle of Man (IoM) accounts were family money, not from a trade.

Based on the HMRC view that the behaviour was deliberate, the assessments went back 20 years. The figures were based on the amount paid into the IoM accounts, and UK banking records where available, and large deposits thought not to be income were excluded from the calculations. HMRC also assessed him as UK resident based on his known ties to the UK.

The FTT found for HMRC. The taxpayer’s principal argument, that the compliance check and conclusions were unfair, was not a matter for the jurisdiction of the tribunal. Looking at the evidence, HMRC had shown that there were deliberate inaccuracies, and raised assessments in accordance with the statutory framework. No reasonable excuse had been provided against the penalties. An officer made a valid discovery and the assessments and penalties were upheld.

Mayet v HMRC [2025] UKFTT 52 (TC)

From Tax Update January 2025, published by Evelyn Partners LLP