William Aggrey v The Commissioners for HMRC
Decision date: 21 June 2022
Neutral citation: [2022] UKFTT 200 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned HMRC discovery assessments and penalties for 2013–14 relating to undeclared rental income and a capital gain on sale of a London flat. The First-tier Tribunal found rental income of £10,287 was received, allowed quantified enhancement and rental expenditure (including a £10,000 allowance), reduced taxable rental profit and recalculated tax and penalties. The Tribunal upheld HMRC’s use of extended time limits by finding the failure to declare rental income was deliberate and the failure to report the gain was careless, allowed the late appeal, and reduced the assessments and penalties accordingly.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
The Tribunal applied that, where a taxpayer asserts enhancement expenditure but cannot produce receipts, the Tribunal may still quantify a reasonable sum on the balance of probabilities if consistent evidence supports it, and may substitute its own penalty calculation where HMRC has applied incorrect statutory minima/maxima. The taxpayer’s prior conduct and contemporaneous dealings (e.g. prior returns, use of agents, correspondence) can support a finding of deliberate non‑disclosure distinct from carelessness, permitting use of extended discovery time limits.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The judgment included comments that a Review Officer’s endorsement of an incorrect penalty calculation does not prevent the Tribunal from correcting the error on appeal, and that personal circumstances such as ill‑health, poverty, ignorance of tax obligations or HMRC delay were not treated as material to the quantum of the assessments in this case.