‘As you will know from the file, as soon as Mr Heaven realised there was a problem with his Self Assessment Return he instructed Mazars to make a voluntary disclosure to HMRC and he has cooperated fully with his accountants throughout the process as has Mrs Heaven. In respect of the Self Assessment Returns, to the best of our clients’ knowledge and belief they have provided everything necessary to their accountants, Mazars, and they, in turn, have made a full disclosure to HMRC.’
‘1. You have submitted returns showing incorrect profits even though accounts were prepared by Mazars. 2. Although the 2008/09 return was submitted prior to the accounts being completed by Mazars, the amount of expenses claimed by you were so much higher than the expenses actually incurred by the partnership that you must have been aware that the amounts claimed were incorrect. 3. Additionally upon receipt of the accounts produced by Mazars, you took no steps to correct the errors in the 2008/09 return. 4. You have deposited into a personal building society account [the Nationwide account] money which you would have known was partnership income. Knowing that Mazars would be unaware of the income, you did not inform them that the money was so deposited. 5. You have created a bank account with the trading name of one of the partnership suppliers [Proserve] and paid money into that account allowing the accountant to believe that the payments represented legitimate business expenses. 6. You have omitted from your tax returns interest that you have received and the amounts were such that you would have been aware that you had been paid interest.’
‘In view of your reported illness, I have considered whether a special reduction might be due and sought advice on this matter. HMRC considers that a special reduction is due where the circumstances are uncommon or exceptional or where the strict application of the penalty law produces a result that is contrary to the clear compliance intention of that penalty law. Whilst your circumstances may have been distressing, it is not considered that your circumstances as outlined to HMRC [in Mr Tully’s letter mentioned above] meet the criteria mentioned above. Therefore a special reduction is not appropriate. Whilst not wishing to appear unsympathetic to your illness, you are a solicitor and must be therefore considered to be a competent person. It has been stated that the returns were completed in a blind panic due to your illness which prevented you from functioning at any level other than your job. HMRC considers that in some respects completing an accurate tax return is a close parallel to what is required in your day to day role as a solicitor. Based on the evidence at hand, I consider that the completion of the incorrect returns was a deliberate act on your part. HMRC has seen no medical evidence which might confirm the nature or extent of your illness. It is unfortunate that you have chosen to decline the offer of a meeting with myself or Mrs Hammond during which HMRC may have been able to gain a greater understanding of how the illness may have affected you and how you came to complete the incorrect returns. In addition you have not explained how you have come to hold an account in a false business name.’
‘the inherent probability or improbability of an event is itself a matter to be taken into account when weighing the probabilities and deciding whether, on balance, the event occurred. The more improbable the event, the stronger must be the evidence that it did occur before, on the balance of probability, its occurrence will be established.’