Nwaneri v The Commissioners for HMRC [2026] UKFTT 581 (TC)

[2026] UKFTT 00581 (TC)Case No TC 09844
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 20 March 2026 (Reading)Date Judgment date: 15 April 2026
Appeal reference: TC/2024/06230
Income tax – Expenses incurred in the performance of duties of employment – Travel expenses – Subsistence expenses – Whether deductible – No - Penalties – Whether behaviour deliberate – Yes – Appeal dismissed.
30-31 March 2026 (Hearing)
Before
TRIBUNAL JUDGE NEWSTEAD TAYLORTRIBUNAL MEMBER AGBOOLA
Between
MR NWANERIAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentMr Nwaneri, in person. for AppellantMr Way, Counsel. for RespondentsDECISION

Introduction

[1]This is an appeal against:(1) Three closure notices dated 16 April 2024 (“the Closure Notices”), issued under Section 28 of the Taxes Management Act 1970 (“TMA”) amending the Appellant’s self-assessment tax returns for the tax periods ending 2019/20, 2020/21 and 2021/22 (“the Returns”) by removing all travel and subsistence expenses claimed by the Appellant: Closure Notices Date Issued Tax Year Sum 16 April 2024 2019/20 £30,393.40 16 April 2024 2020/21 £19,086.90 16 April 2024 2021/22 £29,531.60(2) Three penalty notices dated 15 April 2024, but varied on review on 15 November 2024, issued under Schedule 24 of the Finance Act 2007 (“FA07”) (“the Penalties”): Penalties Date Issued Tax Year Sum 15 April 2024 2019/20 £12,233.34 15 April 2024 2020/21 £7,682.47 15 April 2024 2021/22 £11,886.46

The Evidence

[2]We were provided with(i) a skeleton argument from each party,(ii) a Hearing Bundle of 346 pages,(iii) an Authorities Bundle of 108 pages,(iv) the Appellant’s email, dated 15 March 2026, with 8 attachments and(v) HMRC’s email dated 19 March 2026.[3]Officer King provided a witness statement, was cross-examined by the Appellant and answered questions from the First-tier Tribunal, Tax Chamber (“FTT” or “the Tribunal”). We found him to be an honest witness who was doing his best to assist both the Tribunal and the Appellant.[4]Contrary to the Tribunal’s directions, dated 21 May 2025 and 28 July 2025, the Appellant had not filed or served a witness statement. At the outset of the hearing, it was agreed, without objection from HMRC, that the Appellant’s skeleton argument and the Appellant’s Response to HMRC’s Statement of Case would be treated as the Appellant’s evidence. The Appellant was cross-examined by Mr Way and answered questions from the Tribunal. Whilst we acknowledge that giving evidence in the Tribunal was both an unfamiliar and stressful experience for the Appellant (and have made due allowance in this regard), overall, we found the Appellant’s evidence lacking in credibility especially regarding the basis of and explanation for the expenses declared in the Returns and the later Spreadsheets.

Findings of Fact

[5]The chronology was not in dispute.[6]Based on the evidence provided, we make the following findings of fact on the balance of probabilities.[7]The Appellant has been a full time, locum doctor in the UK since 2010. Between 2010 and 2013 approximately, he worked via an agency and submitted his own self-assessment tax returns (“SATRs”). Between 2013 and 2017/18, he worked via a limited company. Whilst working via a limited company, the Appellant had an accountant who filed his SATRs. In 2017/18, due to legislative changes, he ceased working via a limited company, moved to PAYE and re-commenced filing his own SATRs.[8]During the tax years 2019/20-2021/22, the Appellant worked at a few NHS Trusts, including Southport & Ormskirk NHS (“NHS Southport”) and Shrewsbury & Telford Hospital (“NHS Shrewsbury”).[9]In March 2022, following correspondence from HMRC regarding his overdue SATRs, the Appellant submitted the Returns in bulk and declared the following expenses: Tax Year Travel & Subsistence (“T&S”) Professional Fees Other 2019/20 £54,630 £5,960 £4,360 2020/21 £43,480 £1,192 £872 2021/22 £64,010 £2,384 £992[10]On 9 January 2023, following a review into the Returns and with reference to a sample of the Appellant’s employments at NHS Southport and NHS Shrewsbury, HMRC issued enquiry notices under s.9A TMA 1970 for tax years 2019-2020 to 2021/22 inclusive along with schedule requests for information and/or supporting documentation.[11]On 11 February 2023, the Appellant submitted, by email, a summary breakdown of expenses incurred for NHS Southport and NHS Shrewsbury (“the Spreadsheets”). The schedule requests for information and/or supporting documentation were not fully complied with, the Appellant advising that, due to the passage of time, he did not have invoices. Further, no personal and/or jointly held financial statements, employment/engagement contracts and car MOT & registration documents were provided at this time.[12]On 13 March 2023, HMRC issued a provisional finding report/letter to the Appellant. HMRC assumed, in the absence of full documentation, that the Appellant was employed with NHS Southport and engaged via the intermediary Interact Medical Ltd (“Interact”) for services conducted at NHS Shrewsbury. HMRC provided tax calculations for each tax year and advised the Appellant of the possibility of penalties. HMRC highlighted the following facts. First, that the incurred expenses amounted to approximately 60% of the Appellant’s net PAYE income. Second, that the T&S expenses claimed at NHS Shrewsbury were declared in the self-assessment tax return (“SATR”) at £53,000 whereas the Spreadsheet reported £36,816.00. Third, that the Appellant had claimed T&S expenses in relation to both NHS Southport and NHS Shrewsbury on the basis that he was working at both places for 52 weeks per year. Fourth, the Appellant had claimed diesel costs of £15,600 in addition to claiming HMRC’s approved mileage rate of £0.45.[13]On 5 April 2023, the Appellant provided, by email, details of a fixed-term contract with NHS Southport and a booking confirmation document from Interact linked to engagement at NHS Shrewsbury.[14]On 1 June 2023, HMRC issued a further provisional findings letter to the Appellant on the basis that, as to NHS Southport, the Appellant had a fixed-term contract position and, consequently, he was unable to claim either home-to-work commuting or a daily rate of subsistence. As to NHS Shrewsbury, the Appellant was engaged by Interact Medical as an intermediary and there was no documentary evidence to confirm whether the Appellant was paid by NHS Shrewsbury or Interact Medical. As to mileage, Officer King had determined annual MOT mileage from the DVLA public website, and this mileage was not consistent with that declared by the Appellant on his summary expenses sheet.[15]On 17 July 2023, HMRC wrote to the Appellant noting that no reply had been received to the letter dated 1 June 2023 and inviting the Appellant to make a correction to his 2022/23 SATR. On 20 July 2023, the Appellant accepted the correction to the SATR for the tax year 2022/23 and stated, “It is regrettable that despite giving my best in the challenging times, rather than reward, here I am been prejudicially denied of every benefit and claim I deserve because of dire economic hardship and financial bankruptcy of the country.” On 6 October 2023, HMRC wrote to the Appellant with an amended tax calculation giving effect to the agreed amendment.[16]On 1 December 2023, HMRC wrote to the Appellant seeking his written perspective on potential penalties. On 27 December 2023, the Appellant wrote to HMRC confirming that he did not have any new answers to provide. He also stated that “Since gross mistakes were made in the previous years, I will take into cognisance the legislation and relevant laws in preparing further tax returns, and may need a financial tax advisor in future.”[17]On 15 April 2024, HMRC issued the Appellant with a penalty assessment totalling £31,958.12 as detailed below: Date of Decision AP/Tax y/e 5 April Statutory Provision Amount 15.04.2024 2020 Sch24 FA 07 £12,326.07 15.04.2024 2021 Sch24 FA 07 £7,682.47 15.04.2024 2022 Sch24 FA 07 £11,949.58[18]On 16 April 2024, Officer King issued formal enquiry closure notices for 2019/20, 2020/21 and 2021/22 as follows: Date of Decision Date of Notification AP/Tax y/e 5 April Statutory Provision Amount 16.04.2024 16.04.2024 2020 S.28 TMA 1970 £30,393.40 16.04.2024 16.04.2024 2021 S.28 TMA 1970 £19,086.90 16.04.2024 16.04.2024 2022 S.28 TMA 1970 £29,531.60[19]On 28 June 2024, the Appellant emailed HMRC alleging that the decision “is purely based on bias.” However, the Appellant did not formally appeal the closure notices within 30-days of the decision(s).[20]On 7 July 2024, the Appellant reported to Officer King that he had not received the tax penalty notices, which were re-issued. He stated that “Firstly, to inform you that I am willing and ready to make an appeal for an independent review in connection to your unfair decisions when it is clear that mistakes were not deliberate. Please will you be kind enough to inform me on the process of how to go about it?”[21]On 22 July 2024, following the Appellant’s request for an independent review, Officer King issued a ‘view of the matter’ letter upholding the Penalties.[22]On 4 August 2024, the Appellant emailed the HMRC Review Team confirming, among other matters, that he worked as a locum.[23]On 9 September 2024, the Appellant appealed the amendments made by the Closure Notices.[24]On 13 September 2024, Officer King issued a ‘view of the matter’ letter in respect of the Closure Notices. The Closure Notices and the Penalties were passed for independent review. The Appellant was invited to provide any further information and/or documentation to the HMRC Review Team.[25]On 15 November 2024, Officer Patel issued review conclusion letters, tax decisions and tax penalties. In short, Officer Patel upheld the Closure Notices, upheld the Penalties but varied the amounts and concluded that the Appellant’s behaviour was ‘deliberate’. As to the Penalties, the results of Officer King’s review are detailed below: Date of Decision AP/Tax y/e 5 April Statutory Provision Amount Review Conclusion 15.11.2024 2020 Sch24 FA 07 £12,233.34 Vary 15.11.2024 2021 Sch24 FA 07 £7,682.47 Upheld 15.11.2024 2022 Sch24 FA 07 £11,866.46 Vary Litigation Chronology Date

The Appellant’s Applications

[26]On 15 March 2026, the Appellant made two applications:(1) An application for a case management hearing to be listed in advance of the hearing commencing on 30 March 2026 (“the Case Management Application”). Specifically, the Appellant sought case management directions to “…ensure the fair and efficient disposal of this appeal by establishing a clear timetable for the disclosure of evidence and the exchange of witness statements.”(2) A Hardship Application.[27]By email dated 19 March 2026, HMRC opposed both applications.[28]Noting that Tribunal directions dated 21 May 2025 and 28 July 2025, had twice set down “…a clear timetable for the disclosure of evidence and the exchange of witness statements.” we directed that both applications would be considered at the start of the hearing on 30 March 2026.[29]As to the Case Management Application, the Appellant explained that he sought disclosure of vital documents / information to prevent trial by ambush and promote the overriding objective. During his submissions, the Appellant limited his request for disclosure to a ‘compliance check report.’ He was satisfied that the other documents he had initially referred to were either in the Authorities Bundle, would be addressed by way of submissions and/or were no longer necessary for the Tribunal to decide the appeal.[30]As to the ‘compliance check report’, the Tribunal established that what in fact was being requested was Statements of Liabilities from in or around May 2024 which the Appellant relied on to show miscalculation and errors by HMRC. On the understanding that the Appellant wished to refer to and rely on these documents in relation to submissions on the quantum of the Closure Notices and/or Penalties, we directed disclosure of these documents and provided for both witnesses to be recalled, if necessary, to answer questions in respect of such documents.[31]25 pages of Statements of Liabilities, dated 7 September 2021 to 18 February 2025, were provided by the Appellant at the start of Day 2. As agreed, both Officer King and the Appellant were, in effect, recalled to give evidence and answer questions on the documents.[32]The Appellant, in evidence, set out his position on these documents. He answered questions from the Tribunal. HMRC had no questions for the Appellant. In summary, the Appellant relied on these documents to show, first, a pattern of progression regarding his tax affairs which he considered abnormal. Second, the charging of interest when the Closure Notices / Penalties were under review. Third, the instruction of Enforcement Officers when payment of tax had been stood over. Fourth, duplicated tax in the 2017-2019 period.[33]Officer King answered the Tribunal’s questions which arose from the Appellant’s evidence. The Appellant was satisfied that his case had been correctly put by the Tribunal and asked no questions in cross-examination. In summary, Officer King explained, as best he could, the information given in the Statement of Liabilities. However, he was unable to explain the position regarding interest and Enforcement Officers, noting only that the tax had been stood over. He had no comment on whether the pattern of progression of the Appellant’s tax affairs, as shown by the documents, was abnormal.[34]Ultimately, these documents were not referred to or relied on by the Appellant in respect of the quantum of the Closure Notices and/or Penalties. Instead, the Appellant referred to them to raise matters outside the jurisdiction of the Tribunal, such as(i) interest,(ii) the instruction of Enforcement Officers and(iii) the Appellant’s tax position in tax years 2017/18-2018/19, which were not tax years on appeal to the Tribunal. Accordingly, we do not find these documents helpful in resolving the matters before us in this appeal and say no more about them in this decision.[35]For the avoidance of doubt, we understood HMRC to accept that if the Appellant had concerns in respect of the charging of interest and/or the instruction of Enforcement Officers then these matters could be raised directly with HMRC.[36]As to the Hardship Application, having heard submissions from both parties, we dismissed the application as payment of the tax was not a condition of bringing the appeal. Any discussions concerning the Appellant’s ability to pay and/or time to pay agreements are matters between the parties and not for the Tribunal. The Law i). employment income:[37]Part 5 of the Income Tax (Earnings and Pensions) Act 2003 (“ITEPA”) determines those expenses which may be deducted from employment income.[38]S. 336 ITEPA sets out the general rule: “336 Deductions for expenses: the general rule (1) The general rule is that a deduction from earnings is allowed for an amount if—(a) the employee is obliged to incur and pay it as holder of the employment, and(b) the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment. (2) The following provisions of this Chapter contain additional rules allowing deductions for particular kinds of expenses and rules preventing particular kinds of deductions. (3) No deduction is allowed under this section for an amount that is deductible under sections 337 to 342 (travel expenses).”

if—

[39]In summary, s.336 (1) (a-b) provides that expenses are deductible if two criteria are met. First, that “…the employee is obliged to incur and pay it as holder of the employment…”. Second, that “…the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment…” These criteria are rigid, narrow and restricted in operation, see Michael v The Commissioners for His Majesty’s Revenue & Customs [2026] UKFTT 00096 (TC). Also, in Norman v Goulder H M Inspector of Taxes) (1) (1942-1945) 26 TC 293, a case concerning the deductibility of doctors’ bills under the Income Tax 1918, the Court of Appeal considered whether clothes and food met the ‘wholly and exclusively’ test and stated that:[40]As to travel expenses, s.336 ITEPA does not cover travel expenses; s.336 (3). Ss.337-342 are the sections dealing with the deductibility of travel expenses.[41]S.337 ITEPA sets out the general rule for travel in performance of duties:
“337 Travel in performance of duties (1) A deduction from earnings is allowed for travel expenses if— (a) the employee is obliged to incur and pay them as holder of the employment, and (b) the expenses are necessarily incurred on travelling in the performance of the duties of the employment. (2) This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).”
[42]In brief, s.337 ITEPA largely mirrors s.336 ITEPA save that the second criteria requires that “… the expenses are necessarily incurred on travelling in the performance of the duties of the employment”. HMRC gave as an example of … travelling in the performance of the duties of the employment” a travelling GP undertaking home visits. For the avoidance of doubt, there is no suggestion that s.337 ITEPA applies in this appeal as the Appellant was not travelling in the performance of the duties of the employment.[43]S.338 ITEPA sets out the general rule for travel for necessary attendance:
“338 Travel for necessary attendance (1) A deduction from earnings is allowed for travel expenses if— (a) the employee is obliged to incur and pay them as holder of the employment, and (b) the expenses are attributable to the employee's necessary attendance at any place in the performance of the duties of the employment. (2) Subsection (1) does not apply to the expenses of ordinary commuting or travel between any two places that is for practical purposes substantially ordinary commuting.

(b) a place that is not a workplace and a permanent workplace…”

[44]In summary, s.338(1) restates the general rule save that the second criteria is that “…the expenses are attributable to the employee's necessary attendance at any place in the performance of the duties of the employment.” However. S.338(2) provides that s.338(1) does not apply to “…the expenses of ordinary commuting or travel between any two places that is for practical purposes substantially ordinary commuting.” Ordinary commuting is defined as (a) travel between the employee’s home and permanent workplace or (b) a place that is not a workplace and a permanent workplace; s.338(3) (a-b).[45]S.339 ITEPA, so far as relevant, defines ‘workplace’, ‘permanent workplace’ and ‘temporary workplace’:
“339 Meaning of “workplace” and “permanent workplace” (1) In this Part “workplace”, in relation to an employment, means a place at which the employee's attendance is necessary in the performance of the duties of the employment. (2) In this Part “permanent workplace”, in relation to an employment, means a place which— (a) the employee regularly attends in the performance of the duties of the employment, and (b) is not a temporary workplace. This is subject to subsections (4) and (8). (3) In subsection (2) “temporary workplace”, in relation to an employment, means a place which the employee attends in the performance of the duties of the employment— (a) for the purpose of performing a task of limited duration, or (b) for some other temporary purpose. This is subject to subsections (4) and (5)… (5) A place is not regarded as a temporary workplace if the employee's attendance is— (a) in the course of a period of continuous work at that place— (i) lasting more than 24 months, or (ii) comprising all or almost all of the period for which the employee is likely to hold the employment, or (b) at a time when it is reasonable to assume that it will be in the course of such a period. (6) For the purposes of subsection (5), a period is a period of continuous work at a place if over the period the duties of the employment are performed to a significant extent at the place…” which the employee's attendance is necessary in the performance of the a place which— means a place which the employee attends in the performance of the duties of the employment— This is subject to subsections (4) and (5)… attendance is— (i) lasting more than 24 months, or (ii) comprising all or almost all of the period for which the employee is likely to hold the employment, or significant extent at the place…”

attendance is—

[46]In summary, a permanent workplace (“PWP”) is a place which the employee regularly attends in the performance of the duties of the employment, and it is not a temporary workplace; s.339 (2) (a-b). A temporary workplace (“TWP”) is a place which an employee attends in the performance of the duties of the employment for the purpose of performing a task of limited duration, or for some other temporary purpose; s.339 (3) (a-b). Further, s.339 (5)-(6) provide that a place is not a TWP if an employee attends in the course of a period of continuous work, as defined by s.339 (6), lasting more than 24 months (s.339 (5) (a) (i)) or “…comprising all or almost all of the period for which the employee is likely to hold the employment” (s.339 (5) (a) (ii))or “…at a time when it is reasonable to assume that it will be in the course of such a period.” s.339 (5) (b).[47]S.339A ITEPA considers the position where an employment intermediary is involved:
“339A Travel for necessary attendance: employment intermediaries (1) This section applies where an individual (“the worker”)— (a) personally provides services (which are not excluded services) to another person (“the client”), and (b) the services are provided not under a contract directly between the client or a person connected with the client and the worker but under arrangements involving an employment intermediary. This is subject to the following provisions of this section. (2) Where this section applies, each engagement is for the purposes of sections 338 and 339 to be regarded as a separate employment… (11) In this section— “arrangements” includes any scheme, transaction or series of transactions, agreement or understanding, whether or not enforceable, and any associated operations; “employment intermediary” means a person, other than the worker or the client, who carries on a business (whether or not with a view to profit and whether or not in conjunction with any other business) of supplying labour; “engagement” means any such provision of service as is mentioned in subsection (1)(a);...” another person (“the client”), and client or a person connected with the client and the worker but under sections 338 and 339 to be regarded as a separate employment… agreement or understanding, whether or not enforceable, and any associated client, who carries on a business (whether or not with a view to profit and subsection (1)(a);...”

client, who carries on a business (whether or not with a view to profit and

[48]In short, s.339A(1) defines the relevant relationships, namely the worker (for example a doctor) personally provides services to the client (for example an NHS Trust) not under a contract between the doctor and the NHS Trust but under arrangements involving an employment intermediary. Where s.339A applies, each engagement is regarded as a separate employment; s.339A (2). ii). Penalties - Schedule 24 of the Finance Act 2007:[49]Schedule 24 of FA07 provides, so far as relevant, as follows.[50]Paragraph 1 Sch 24 FA 07 states: “1(1) A penalty is payable by a person (P) where–(a) P gives HMRC a document of a kind listed in the Table below, and(b) Conditions 1 and 2 are satisfied. (2) Condition 1 is that the document contains an inaccuracy which amounts to, or leads to– (a) an understatement of a liability to tax,.. (2) Condition 2 is that the inaccuracy was careless (within the meaning of paragraph 3) or deliberate on P’s part. (3) Where a document contains more than one inaccuracy, a penalty is payable for each inaccuracy. Tax Document Income tax or capital gains tax Return under section 8 of TMA 1970 (personal return).

(d) repayments, or any other kind of payment or credit, to P

[51]Paragraph 3, Sch 24 FA 07 considers ‘Degrees of Culpability’:
“3(1) For the purposes of a penalty under paragraph 1, inaccuracy in a document given by P to HMRC is–… “(a) ‘careless’ if the inaccuracy is due to failure by P to take reasonable care, (b) deliberate but not concealed” if the inaccuracy is deliberate on P's part but P does not make arrangements to conceal it, …”
[52]Paragraph 4, Sch 24 FA 07 sets out the standard amount of the penalty payable under Paragraph 1, Sch 24 FA 07 as “ …4(2) If the inaccuracy is in category 1, the penalty is– …(a) for careless action 30% of the potential lost revenue,(b) for deliberate but not concealed action, 70% of the potential lost revenue, …” The inaccuracy in this case is in category 1 as it is a domestic matter within Paragraph 4A (1) (a) & 4A (5), Sch 24 FA 07. The potential lost revenue (“PLR”) is defined by Paragraphs 5-8, Sch 24 FA 07.[53]Paragraphs 9-10, Sch 24 FA 07 set out reductions for the quality of disclosure, namely reductions for telling, helping and giving. Paragraph 11 (1), Sch 24 FA 07 gives HMRC a discretion to reduce a penalty where there are special circumstances. However, special circumstances do not include the matters listed at Paragraph 11 (2), Sch 24 FA07 namely “…(a) ability to pay, or (b) the fact that a potential loss of revenue from one taxpayer is balanced by a potential over-payment by another…”[54]Paragraph 15, Sch 24 FA 07 sets out a party’s appeal rights. In brief, a person may appeal against a decision of HMRC(1) that a penalty is payable and/or(2) as to the amount of penalty payable; Paragraphs 15 (1-2), Sch 24 FA 07.[55]Paragraph 17, Sch 24 FA 07 sets out the Tribunal’s powers on appeal. Specifically, on an appeal under Paragraph 15(1) the tribunal may affirm or cancel HMRC's decision; Paragraph 17 (1) Sch 24 FA 07. On an appeal under Paragraph 15(2) the tribunal may affirm HMRC’s decision or substitute another decision that HMRC had power to make for HMRC's decision; Paragraph 17 (1) Sch 24 FA 07. (III). penalty – case law:[56]In Auxilium Project Management v HMRC [2016] UKFTT 249 (TC), §63 (“Auxilium”), the FTT considered what is meant by ‘deliberate and not concealed’ behaviour as follows:[57]In Commissioners for HMRC v Tooth [2020] UKSC17 (“Tooth”), the Supreme Court set out a test to establish deliberate behaviour in the context of discovery provisions. However, at paragraph 27, the Supreme Court noted that “…broadly similar differential treatment of careless and deliberate conduct by the taxpayer is reflected in different levels of penalty which may be imposed. The penalty scheme is contained in Schedule 24 to the Finance Act 2007.” Accordingly, the deliberate behaviour test established in Tooth is applicable when considering deliberate behaviour under Sch 24 FA 07. At paragraphs 42 – 46 of Tooth, the Supreme Court noted that for behaviour to be deliberate a statement must be shown to have been deliberately inaccurate at the time it was made. Further at Paragraph 47, the Supreme Court stated:[58]Further, in New Claire Wine Limited v The Commissioners for His Majesty’s Revenue & Customs [2026] UKUT 00116 (TCC)(“New Claire Wine”) the Upper Tribunal stated that “We are satisfied that the Upper Tribunal in CF Booth was right to conclude that dishonesty is not an essential element of a deliberate inaccuracy. It is supported by the Court of Appeal decision in Citibank NA and E Buyer UK Ltd v HM Revenue & Customs [2017] EWCA Civ 1416 (“E Buyer”)…” Accordingly, there is no need to prove dishonesty to establish a deliberate inaccuracy.

Burden of Proof

[59]The burden of proof is on HMRC to show that the enquiries into the Returns were valid.[60]The burden of proof is on the Appellant to show that the Closure Notices were excessive, that NHS Southport and NHS Shrewsbury were TWPs and that he was obliged to incur the other expenses.[61]The burden is on HMRC in respect of the appeal against the imposition of penalties for deliberate behaviour.[62]The standard of proof is the balance of probabilities, being more likely than not.

Grounds of Appeal

[63]The Appellant’s Grounds of Appeal state as follows:
“The HMRC reviewer did not consider my work as a self employed locum despite evidence. He believed that I worked as a fixed term contact which is a lie. I have ever had a fixed term contract with the two hospitals. All the jobs are based on locum contracts as I filled in temporary positions purely on a daily basis. The penalty imposed was unfair and based on “careless” behaviour which is disputed. There were wrong and duplicate charges hence needed to be reconciled. Theses over charges and miscalculations formed part of the charges and penalty.”
[64]The points in issue in this appeal are:(1) The validity of the enquiries.(2) As to travel expenses, whether NHS Southport and/or NHS Shrewsbury were PWPs and therefore travel from the Appellant’s home to the NHS Trust was ordinary commuting and not deductible, or whether they were TWPs such that travel expenses are deductible.(3) As to subsistence, whether the Appellant was obliged to incur and pay these expenses as holder of the employment at NHS Southport and/or NHS Shrewsbury and whether these expenses were incurred “…wholly, exclusively and necessarily in the performance of the duties of the employment…”(4) As to the Penalties, whether the Appellant’s behaviour was deliberate.[65]We address each of these issues in turn below. Analysis i). Validity of the enquiries:[66]As to the validity of the Enquiry Notices, the Returns were filed in March 2022. The enquiries were opened on 9 January 2023. Accordingly, the enquiries were opened within 12 months. Therefore, we are satisfied that the enquiries were opened within the time limits specified in s.9A (2) (a-b) TMA 1970. ii). Intermediary:[67]In this case, the Appellant provided his services to NHS Southport and NHS Shrewsbury via Interact, an employment intermediary. Accordingly, s.339A ITEPA is engaged and “… each engagement is for the purposes of sections 338 and 339 to be regarded as a separate employment.”; s.339A (2) ITEPA.[68]We note that during the investigation the Appellant provided to HMRC the details of a fixed-term contract with NHS Southport. However, this was an entirely generic document, not specific in any way to the Appellant. Despite initial concerns about contradictions between the Appellant’s oral evidence and his email dated 5 April 2023, we accept the Appellant’s oral evidence that he never had a fixed term contract with NHS Southport. Whilst the Appellant’s email of 5 April 2023 could have been clearer as to the relevance of this contract, we accept that he discovered the generic fixed term contract during the enquiry and provided it to HMRC in an attempt to assist. We accept that, as stated in oral evidence and as supported by a letter dated 16 December 2024 from Interact, the Appellant provided his services to NHS Southport and NHS Shrewsbury via Interact.[69]Further, we accept that the Appellant’s employment with NHS Shrewsbury was subject to the IR35 legislation, as stated on the booking confirmation for NHS Shrewsbury: “The job has been assessed by the end client and is deemed to fall within the scope of IR35. As such, appropriate PAYE payroll deductions will be made.” iii). Travel Expenses:[70]A deduction from earnings for travel expenses is permissible if(a) the Appellant is obliged to incur them and pay them as holder of the employment and(b) the expenses are attributable to the Appellant’s necessary attendance at any place in the performance of the duties of employment; s.338 (1) (a-b) ITEPA.[71]However, travel expenses are not deductible where they amount to ordinary commuting; s.338 (2) ITEPA. ‘Ordinary commuting’ is defined at s.338 (3) (a-b) as (a) travel between the employee’s home and a permanent workplace.[72]Accordingly, we must consider whether the Appellant’s travel between his home and NHS Southport and between his home and NHS Shrewsbury is ‘ordinary commuting’ within s.338 ITEPA. In reaching a conclusion on ‘ordinary commuting’, we must also consider whether NHS Southport and/or NHS Shrewsbury were a PWP.[73]A workplace is defined as “…a place at which the employee's attendance is necessary in the performance of the duties of the employment.” Both NHS Southport and NHS Shrewsbury were ‘workplaces’ within s.339 (1) ITEPA.[74]A PWP is defined as “…a place which(a) the employee regularly attends in the performance of the duties of the employment and(b) is not a temporary workplace.” S.339 (2) (a-b) ITEPA.We are satisfied that both NHS Southport and NHS Shrewsbury were places which the Appellant regularly attended in the performance of the duties of his employment. The question for consideration (and the crux of the dispute between the parties) is whether, in fact, NHS Southport and/or NHS Shrewsbury were TWPs. If either were TWPs then travel between the Appellant’s home and that workplace would not be ‘ordinary commuting.’[75]A TWP is defined by s.339 (3) ITEPA as “…a place which the employee attends in the performance of the duties of the employment—(a) for the purpose of performing a task of limited duration, or(b) for some other temporary purpose.” We understood the Appellant’s position to be that as a locum doctor he attended both NHS Southport and NHS Shrewsbury for the purpose of performing a task of limited duration, namely his shift. HMRC did not accept that either NHS Southport or NHS Shrewsbury were TWPs within s.339 (3) ITEPA.[76]When considering whether a place is a TWP, s.339 (2-3) ITEPA is a starting point. The TWP definition in s.339 (3) ITEPA is subject to Ss.339 (4-5) ITEPA. Accordingly, further consideration is required of s.339 (4-5) ITEPA. HMRC accepted that s.339 (4) ITEPA was not engaged. However, HMRC contended that s.339 (5)(a) (ii) or(b) ITEPA may apply. Under s.339 (5) (a) (ii), neither NHS Southport nor NHS Shrewsbury are TWPs if the Appellant’s attendance is in the course of a period of continuous work at those places “…comprising all or almost all of the period for which the employee is likely to hold the employment…” or if the Appellant’s attendance is “…at a time when it is reasonable to assume that it will be in the course of such a period.” S.339 (6) ITEPA defines a period as a period of continuous work at a place if “…over the period the duties of the employment are performed to a significant extent at the place…”[77]Unfortunately (and perhaps oddly), the Appellant disclosed only one booking confirmation for work done at NHS Shrewsbury and none for work done at NHS Southport. He also failed to disclose any emails, records of shifts or time sheets relating to his engagement with either NHS Trust. His explanation for their absence was, first, that he didn’t realise what was needed. Second, that he was very busy working in hospitals. Third, that “I wasn’t disposed” due to the volume of work he was doing.Accordingly, the only available, objective evidence was one booking confirmation for an engagement at NHS Shrewsbury, a letter from Interact dated 16 December 2024 and details of the Appellants net income in the respective tax years. The booking confirmation showed that between 12-18 October 2020 the Appellant did 5-night shifts (22.00 – 08.30) in A& E at £100 per hour. Interact confirmed that bookings were made for Dr Nwaneri on a month to month rolling basis. The Appellant’s net income for the sample tax year (2021/22) shows that the majority of his net income related to NHS Shrewsbury (£98,851) and NHS Southport (£14,906). The Appellant’s evidence was that all assignments with NHS Southport and NHS Shrewsbury were via Interact. Therefore, we find, on the balance of probabilities, that each assignment (whether at NHS Shrewsbury or NHS Southport) would have followed a similar format being a number of days with prescribed times for attendance.[78]Considering all the available evidence, we find that the Appellant’s engagements with NHS Southport and NHS Shrewsbury are, in accordance with s.339A (2) ITEPA, separate employments. Further, we agree with Mainpay Ltd v Revenue & Customs Commissioners [2023] UKFTT 16 (TC) (“Mainpay”) that each of the Appellant’s assignments are themselves a separate employment. Therefore, the workplace (NHS Southport or NHS Shrewsbury) at which the Appellant carried out an assignment is not a TWP because the “…period of the employment is the period of the assignment and … the individual will attend the workplace for all or almost all of that period….”Mainpay, §151. In short, s.339 (5)(a) (ii) ITEPA prevents the workplace being a TWP. For example, in this case, the Appellant was employed to attend NHS Shrewsbury from 12-18 October 2020 for 5-night shifts (22.00-.08.30). The Appellant attended NHS Shrewsbury for all or almost all that period, therefore the workplace is not a TWP under s.339 (5) (a) (ii) ITEPA. Further or alternatively, we consider that the Appellant’s attendance at NHS Southport and/or NHS Shrewsbury “…is at a time when it is reasonable to assume that it will be in the course of such a period.”; s.339 (5)(b) ITEPA.[79]Therefore, we find that NHS Southport and/or NHS Shrewsbury were PWPs and, consequently, travel expenses are ordinary commuting expenses and not deductible; s. 338 (3) (a) ITEPA.[80]Further and for the avoidance of doubt, for the reasons set out in greater detail at paragraphs 95 (6) (a-f) below, we are not satisfied, on the balance of probabilities, that the Appellant incurred travel expense in the significant amounts claimed. iv). Subsistence Expenses:[81]Pursuant to s.336 ITEPA, the general rule provides that subsistence expenses are only deductible if(a) the Appellant was obliged to incur and pay them as holder of the employment at NHS Southport and/or NHS Shrewsbury and(b) “…the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment.”[82]As to (a), the Appellant was not obliged to incur and pay subsistence expenses as holder of the employment at NHS Southport and/or NHS Shrewsbury. It was not, for example, a term of his employment that he incurred such expenses.[83]As to (b), in light of Norman v Goulder H M Inspector of Taxes) (1) (1942-1945) 26 TC 293 (detailed at paragraph 39 above) and as a matter of common sense, it cannot be said that subsistence expenses (being, in this appeal, food and drink) are “…incurred wholly, exclusively and necessarily in the performance of the duties of the employment.” They are, clearly, incurred also as a matter of human life.[84]Accordingly, we find that the subsistence expenses at issue are not deductible expenses as a matter of principle.[85]Further and for the avoidance of doubt, in the absence of any detail as to the food and/or drink purchased, receipts and/or bank statements we are not satisfied, on the balance of probabilities, that the Appellant incurred subsistence expense in the amount of £14 per day. v). Deliberate behaviour or not:[86]There are two components for the payment of a penalty:(1) First, that a person, in this case the Appellant, gives HMRC a document of a kind listed in the Table in Sch 24 FA07; Paragraph 1 (1) (a) Sch 24 FA 07, and(2) Second, that Conditions 1 and 2 are satisfied; Paragraph 1 (1) (b) Sch 24 FA 07.[87]As to the first component:(1) In March 2022, the Appellant filed the Returns. Each of these Returns individually is a document listed in the Table in paragraph 1 of Sch 24 FA 07.(2) On 11 February 2023, the Appellant sent the Spreadsheets to HMRC. These Spreadsheets are also documents of a kind listed in the Table in Sch 24 FA07, being “Any document which is likely to be relied upon by HMRC to determine, without further inquiry, a question about— (a) P’s liability to tax.”[88]Accordingly, we find that the entry threshold for a penalty has been crossed. In this case, only one penalty per tax year has been charged. HMRC has not charged penalties for each Return and each Spreadsheet per tax year. In this decision, we consider the Returns to be the documents initially ‘triggering’ the Penalties and the Spreadsheets to be documents seeking to substantiate the Returns. We consider that this reflects the chronology. Albeit, for the avoidance of doubt, we consider that the same conclusions would be reached if we relied on the Spreadsheets as initially triggering the Penalties.[89]As to the second component, Condition 1 “…is that the document contains an inaccuracy which amounts to, or leads to – (a) an understatement of a liability to tax,..”. The Appellant accepted that the Returns were inaccurate in that they contained errors relating to T&S expenses. Notably, in an email dated 27 December 2023, the Appellant stated that “Since gross mistakes were made in the previous years, I will take into cognisance the legislation and relevant laws in preparing further tax returns, and may need a financial tax advisor in future.” Whilst in evidence the Appellant tried to distance himself from this comment, we are satisfied that the Appellant now accepts (and we find) that the Returns contain inaccuracies which amount to / lead to an understatement of a liability to tax, whether the Appellant knew the Returns contained inaccuracies at the time of filing is a matter for consideration later in this decision. In the circumstances, we find that Condition 1 is satisfied.[90]As to Condition 2, “…the inaccuracy was careless (within the meaning of paragraph 3) or deliberate on P’s part…” The Penalties total £31,802.27 and are based on deliberate but not concealed behaviour. HMRC maintains that the Appellant’s behaviour was deliberate. The Appellant strenuously denies this. In closing submissions, he stated that he had no motive to behave in such a way. He reminded the Tribunal that he was a practising doctor with a demanding job who was subject to regulatory oversight and had an inherent professional standing. In such circumstances, he said that it would be irrational for him to jeopardise his career by knowingly submitting inaccurate documents. In summary, he submitted that, at its highest, his behaviour was careless. We have taken all the Appellant’s submissions into account in our analysis. We have also acknowledged that some of the tax years in issue coincided with the Covid-19 pandemic when the medical profession was under intense pressure.[91]Deliberate has been defined by both the Tribunal and the Supreme Court. In Auxilium, the Tribunalstated that “… a deliberate inaccuracy occurs when a taxpayer knowingly provides HMRC with a document that contains an error with the intention that HMRC should rely upon it as an accurate document. This is a subjective test…” In Tooth, the Supreme Court stated that “…for there to be a deliberate inaccuracy in a document … there will have to be demonstrated an intention to mislead the Revenue on the part of the taxpayer as to the truth of the relevant statement or, perhaps, (although it need not be decided on this appeal) recklessness as to whether it would do so.” For the avoidance of doubt, neither party addressed us on whether the Appellant’s behaviour was reckless and, if it was, whether recklessness sufficed for the deliberate test. HMRC contended that the Appellant’s behaviour was deliberate. The Appellant contended that his behaviour was careless.[92]We have given anxious scrutiny to the question of whether the inaccuracies in the Returns were deliberate on the Appellant’s part. We reminded ourselves that HMRC bear the burden of proof (on the balance of probabilities). We referred ourselves to the legal tests in Auxilium and Tooth and noted that “…dishonestyis not an essential element of a deliberate inaccuracy…”New Claire Wine. We referred to and relied on the following points:(1) The Returns were not the first SATRs completed by the Appellant. He had completed, either himself or via an accountant, SATRs since in or around 2010.(2) The Appellant confirmed in oral evidence that he completed the Returns himself.(3) In oral evidence, the Appellant was completely unable to explain the basis on which the T&S expenses in the Returns had been calculated, albeit he denied making up the figures. He stated that he had ‘never gone back to see what informed’ the 2019/20 Return.(4) No objective evidence, such as financial bank statements and/or receipts, were submitted to HMRC (or to the Tribunal) to substantiate the T&S expenses included in the Returns. In re-examination, the Appellant stated, for the first time, that he had moved house and his papers were all over. No objective evidence or further detail of a house move was provided. We find that there was no objective basis for the figures and, notably, that the Appellant took no steps to verify the figures included in the Returns by, for example, checking his bank statements.(5) The Appellant couldn’t recall if the Spreadsheets were prepared before or after the Returns and couldn’t recall at all if the Spreadsheets were the basis for the Returns. We find, on the balance of probabilities, that the Spreadsheets were prepared after the Returns and as part of the enquiry to substantiate the figures in the Returns.(6) In the Spreadsheets, the Appellant attempted to explain the figures in the Returns. Unfortunately, the Spreadsheets raise more questions than they answer. (a) The totals in the Spreadsheet do not match the total in the Returns. By way of example, the Spreadsheet for 2019/20 claims T&S expenses of £27,140 in respect of NHS Southport and £24,544 in respect of NHS Shrewsbury. In contrast, the Return for 2019/20 claims T&S expenses in respect of NHS Southport of £25,856 and £20,000 in respect of NHS Shrewsbury, both being less than the expenses listed in the Spreadsheet. (b) As to mileage, in the 2019/20 Return: (i) The Appellant claimed travel from his home to/from NHS Southport x5 days per week for 52 weeks a year, totalling £10,530. In cross examination, the Appellant maintained, despite HMRC’s evident incredulity, that he worked 5 days per week 52 weeks per year at NHS Southport. In addition, he claimed travel from his home to/from NHS Shrewsbury x4 days per week for 52 weeks a year, totalling £11,232. For the avoidance of doubt, the Appellant accepted that he did not do double shifts i.e. a shift at NHS Southport and then a shift at NHS Shrewsbury on the same day. Accordingly, the Appellant’s evidence was that he incurred travel expenses 9 days per week. This is impossible. There are only 7 days in a week. In cross-examination, the Appellant accepted that there was an error somewhere in terms of calculation. He claimed that he didn’t see this error when he prepared the 2019/20 Return. We find that the 2019/20 Return is obviously wrong, there are only 7 days in a week, and, consequently, that the Appellant knew at the time of filing the Return that he was claiming travel expenses for more days than there were in a week. (ii) As to the mileage itself, the Appellant claimed 23,400 miles to/from NHS Southport and 24,960 miles to/from NHS Shrewsbury, totalling 48,340 miles. The Appellant did not refer to or rely on any objective evidence to support this milage. At the relevant time, the Appellant owned a Ford Galaxy. He did not own any other car. The DVLA mileage logs for the Ford Galaxy show that it travelled 18,000 miles in the 2019/20 tax year, some of this mileage would, presumably, be non-work related. In short, in the 2019/20 tax year the Appellant did not own a car that travelled 48,340 miles. In cross-examination, the Appellant said that he guessed the mileage. In fact, the Appellant overstated the mileage by 30,000 miles. He denied knowingly including figures referable to inaccurate mileage in the 2019/20 Return. He claimed that it was human error / mistake and not a fabrication. He blamed the speed with which he prepared the 2019/20 Return. We find, on the balance of probabilities and in light of the knowing inclusion of mileage for 9 days per week, that the Appellant knowingly included significantly excessive mileage in the 2019/20 Return. (c) As to diesel in the 2019/20 Return, the Appellant claimed £50 per round trip to both NHS Southport and NHS Shrewsbury even though a round trip to NHS Southport is approximately 90 miles and a round trip to NHS Shrewsbury is approximately 120 miles. In cross-examination, the Appellant maintained his belief that he incurred £50 on every trip. He adduced no receipts or bank statement to support this expenditure. Due, in part, to the difference in mileage between the two trips we find that, at the time of filing the 2019/20 Return the Appellant knew that the figures for diesel were inaccurate. (d) As to subsistence expenses in the 2019/20 Return, again the Appellant claimed these expenses for x5 days per week for 52 weeks per year in respect of NHS Southport and x4 days per week for 52 weeks per year for NHS Shrewsbury. These expenses are subject to the same issue as the milage expenses in that there aren’t 9 days in a week. Accordingly, as above, we find that the Appellant knew at the time of filing the 2019/20 Return that he was claiming subsistence expenses for more days than there were in a week. Further, no receipts or bank statements were provided to evidence the Appellant spending £14 per day, which he described as an approximate figure Whilst the Appellant asserted that he ate at the hospital canteen and/or shops and capped his spending at £14 per day, he could not identify what he had bought for £14, simply asserting it was food. (e) The discrepancies detailed in paragraphs 92 (6) (c-e) above (namely, claiming mileage and subsistence for more than 7 days per week, claiming mileage more than the mileage travelled by the Appellant’s motor vehicle and claiming inaccurate sums for diesel) are also seen in the Returns and Spreadsheets for 2020/21 and 2021/22. In the circumstances, we make like findings in respect of the mileage, diesel and subsistence claims in the 2020/21 and 2021/22 Returns, namely that the Appellant knew at the time of filing these Returns that the figures claimed for T&S expenses were inaccurate.(7) The T&S expenses claimed by the Appellant were an extremely high percentage of the Appellant’s income. By reference to the 2020/21 Return, the Appellant claimed T&S expense of £53,000 in respect of NHS Shrewsbury as against net income of £98,851, being 54%. Also, the Appellant claimed T&S expenses of £10,800 in respect of NHS Southport as against net income of £14,906, being 72%. In the circumstances, the Appellant ought to have been on notice of the need to verify the expenses claimed. We find that the fact that the Appellant took no steps to verify the expenses indicates that he knew the T&S expenses claimed in the Returns were inaccurate.(8) The Appellant was given several opportunities to explain the reason for the submission of inaccurate figures but has failed to do so. In evidence, the Appellant asserted that he only became aware of the errors during cross-examination. We do not accept that. The errors had been pointed out to the Appellant by Officer King in correspondence since at least March 2023. The Appellant has been given several opportunities to explain the errors, but he has failed and or refused to do so. We do not accept his assertion, made in cross-examination, that he had not received some HMRC letters. The Appellant’s correspondence with HMRC shows, by reference to HMRC’s letters, that he was receiving HMRC’s correspondence. Notably, by email dated 27 December 2023, the Appellant declined to provide his written perspective, and he did not provide a ‘formal’ witness statement in these proceedings. We consider that this failure to provide an explanation is because the Appellant knew that the inaccuracies were not explicable.[93]In the circumstances, we have concluded that the inaccuracies in the Returns were deliberate on the Appellant’s part. Whilst we accept that some of the above factors individually may not suffice to indicate deliberate behaviour on their own (for example an absence of receipts may be a compliance issue as opposed to an indicator of deliberate behaviour, we consider that others individually (for example the Appellant claiming mileage and subsistence expenses for more than 7 days per week) and all of the factors taken cumulatively show that the Appellant knowingly provided HMRC with inaccurate Returns with the intention that HMRC should rely on them as accurate documents. Accordingly, we find that Condition 2 is satisfied and that the Appellant’s behaviour was deliberate.[94]Further and for the avoidance of doubt, we are satisfied that the Penalties have been correctly calculated in accordance with Paragraphs 4-8, Sch 24 FA 07. We also agree with the reductions for telling, helping and giving under Paragraphs 9-10, Sch 24 FA 07. Whilst the Appellant considered that the reductions could be higher, we note that he has never provided the documentary evidence (receipts and bank statements) requested and that he failed and/or refused to provide an explanation prior to the issue of the Penalties. Finally, in the absence of. any special circumstances, Paragraph 11 (1), Sch 24 FA 07 does not apply.

Decision

[95]Accordingly, we dismiss the appeal.

Right to apply for permission to appeal

[96]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. JENNIFER NEWSTEAD TAYLOR TRIBUNAL JUDGE Release date: 15 April 2026