Mr Mikhail completed his tax return to the best of his knowledge. He was a member of the National Health Service Pension Scheme and the growth in value of his pension fund needed to be taken into account in computing the annual allowance charge. The NHS Pension Scheme did not provide details until after Mr Mikhail had submitted his return. The omission emerged as part of an enquiry by H M Revenue & Customs into his pension arrangements which resulted in additional tax being due.
Mr Mikhail agreed the additional tax but disputed the penalties as when the return was submitted he did not have the relevant information and therefore the understatement was not careless. However the tribunal decided that the failure to act on information provided by the pension provider subsequently was careless. Therefore the penalty was payable.
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