Mohammed Maasher v The Commissioners for HMRC [2026] UKFTT 911 (TC)

[2026] UKFTT 00911 (TC)Case No TC 09920
FIRST-TIER TRIBUNAL
TAX CHAMBER
Venue ManchesterHearing Heard on: 15 May 2026Date Judgment date: 18 June 2026
Appeal reference: TC/2025/00992
CLOSURE NOTICE – business expenses – appeal allowed in part
Before
TRIBUNAL JUDGE JENNIFER DEANMEMBER SUSAN STOTT
Between
MOHAMMED MAASHERAppellantTHE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND CUSTOMSRespondentMr M. Maasher, assisted by his son Mr Maasher. for AppellantMr Elliott, litigator of HM Revenue and Customs’ Solicitor’s Office for RespondentsDECISION

Introduction

[1]This is an appeal against a Closure Notice issued on 19 March 2024 under Section 28A(1B) and (2) of the Taxes Management Act 1970 (TMA 1970) in relation to the Appellant’s 2020-2021 Self-Assessment Tax Return. The Closure Notice was issued in relation to business expenses claimed by the Appellant which were disallowed.[2]The amount of the Closure Notice was varied a number of times, as we set out below. In its Statement of Case, HMRC now seek a further revised figure of £14,585.05.

Background

[3]The following was not in dispute and is taken from the parties’ written submissions.[4]Mr Maasher is a self-employed Arabic translator who travels between court, the police station and solicitors’ office providing translation services. Mr Maasher also receives income from two properties.[5]On 31 January 2022 Mr Maasher submitted a tax return for the tax year ending 5 April 2021, in which he declared the following:• Turnover from self-employment £84,202• Self-employment expenses £41,663• Property Income £14,438• Property expenses £8,000 £10,700• Property losses brought forward from previous tax year £10,700• Total Tax & National Insurance Contributions (NICs) £8,889.91[6]On 15 December 2022 HMRC opened an enquiry into the tax return under Section 9A TMA 1970. The enquiry looked into Mr Maasher’s turnover and expenses from self-employment, and the income and expenses relating to the two properties.[7]On 14 February 2023 Mr Maasher’s then agent, Ali & Co Accountant, wrote to HMRC including some of the records requested by HMRC in their initial enquiry letter. The Agent confirmed that the Appellant’s self-employed income was actually £90,223 not £84,202. This was due to an error whereby an amount of property income had been declared when it should have been declared as self-employed income.[8]On 15 March 2023 HMRC requested further documentation. On 12 April 2023, the agent sent a breakdown of Mr Maasher’s expenses relating to his self-employment. This figure was amended from £41,663 to £34,943. The email also contained further documentation as per HMRC’s request of 15 March 2023.[9]On 19 April 2023 HMRC requested a further breakdown of the expenses claimed, and an explanation as to what the subcontractor costs related to. This information was received on 31 May 2023 when the agent confirmed that the subcontractor costs referred to payments made by Mr Maasher to his wife of £12,000 for translation and proofreading work, and £6,000 to his daughter for clerical work and English proofreading.[10]On 4 August 2023 HMRC issued a Pre-Closure Notice informing Mr Maasher of their intention to make the following amendments to their tax return:• Increase the turnover figure from £84,202 to £90,233.08 (removed from property income)• Decrease the expenses figure from £41,663 to £19,539.80• Decrease the property income from £14,438 to £8,437.24 (included in turnover figure)[11]Further information was provided by Mr Maasher and on 9 January 2024 HMRC issued a second Pre-Closure Notice as follows:• Increase the turnover figure from £84,202 to £90,233.08 (as above)• Decrease the expenses figure from £41,663 to £10,236.34• Decrease the property income from £14,438 to £8,437.24 (as above)[12]Mr Maasher provided further information regarding the subcontractor costs.[13]On 19 March 2024 HMRC issued a Final Closure Notice as follows:• Increase the turnover figure from £84,202 to £90,233.08 (as above)• Decrease the expenses figure from £41,663 to £15,051.51• Decrease the property income from £14,438 to £8,437.24 (as above)[14]After the amendment to Mr Maasher’s tax return, HMRC revised the total Income Tax and NICs due for the tax year 2020-2021 from £8,889.91 to £21,880.04. The difference between the two amounts is £12,990.13, which was the amount of the Closure Notice issued to the Appellant.[15]On 15 April 2024 Mr Maasher requested an independent review of the decision and supplied further information.[16]On 1 May 2024 Officer Townsend issued a View of Matter letter, acknowledging the review request. In the letter, Officer Townsend reverted to the figures used in the Pre-Closure Notice of 9 January 2024, decreasing the expenses figure from £41,663 to £10,236.34.[17]On 14 January 2025 HMRC (officer Sutton) issued the Review Conclusion Letter which varied the amount of expenses, due to errors found in Officer Watkiss’ and Officer Townsend’s calculations. The amount to be assessed was varied from £12,990.13 to £16,058.31.[18]On 11 February 2025 Mr Maasher appealed to the Tribunal.

Issues

[19]Whether the closure notice is correct and that it was issued in accordance with the relevant legislation.[20]Whether the amendments to the closure notice are excessive.[21]HMRC also seek the Tribunal to vary the amount of the closure notice to the revised figure of £14,585.05.[22]The Respondents bear the burden of proof to show the closure notice is competent, correct and in accordance with section 28A of the TMA 1970.[23]The burden then falls to the Appellant by virtue of Section 50(6) TMA 1970, to demonstrate that the amounts included within the closure notice are excessive.

Law

[24]Section 9A TMA 1970 states that an officer of the Board may enquire into a return under section 8 or 8A of this Act if he gives notice of his intention to do so to the person whose return it is within the time allowed. The time allowed is up to twelve months after the day on which the Self-Assessment Tax Return was delivered.[25]The Self-Assessment Tax Return was submitted on 31 January 2022.[26]There was no dispute that HMRC opened their compliance check on 15 December 2022, meaning that it was opened in time, and it is therefore valid.[27]The Closure Notice was issued under Section 28A(1B) and (2) TMA 1970, in relation to business expenses claimed by Mr Maasher.[28]Section 28A(1B) TMA 1970 states that the enquiry is completed when an officer of HMRC informs the taxpayer by notice that the officer has completed his enquiries.[29]Section 28A(2) states that the closure notice must state the officer’s conclusions and make the amendments to the return required to give effect to his conclusions.[30]Under section 50(6) Taxes Management Act 1970, an assessment shall "stand good" unless the taxpayer establishes that it is wrong.[31]Section 34 ITTOIA 2005 permits a deduction of expenses incurred wholly and exclusively for the purposes of the trade.[32]Section 57A ITTOIA 2005 states in calculating the profits of a trade, a deduction is allowed for any reasonable expenses incurred on food or drink for consumption by the trader at a place to which the trader travels in the course of carrying on the trade, or while travelling to a place in the course of carrying on the trade, if conditions A and B are met. Condition A is met if: a). a deduction is allowed for the expenses incurred by the trader in travelling to the place, or b). where the expenses of travelling to the place are not incurred by the trader, a deduction would be allowed for them if they were. Condition B is met if: a). at the time the expenses are incurred on the food and drink, the trade is by its nature intinerant, or b). the trader does not travel to the place more than occasionally in the course of carrying on the trade and either; i. the travel in connection with which the expenses are incurred on the food and drink is undertaken otherwise than as part of the trader’s normal pattern of travel in the course of carrying on the trade, or ii. the trader does not have such a normal pattern of travel.

Evidence

[33]We heard evidence from Freja Watkiss, officer of HMRC, Mr Maasher, Ms Noor Makarem (Mr Maasher’s wife) and Miss Farah Maasher (Mr Maasher’s daughter).[34]The following is a summary of the salient points of the evidence.[35]Ms Watkiss explained she opened an enquiry into Mr Maasher’s SA tax return for the tax year ended 5 April 2021 under s9A TMA 1970 on 15 December 2022. On 19 December 2022 she conducted a more in-depth risk review and concluded that there were the following potential risks from the return:• . The income from Mr Maasher’s properties may be understated as he owned three properties and declared £14,438 on the SA return.• Round sum expenses were declared for both the properties and self-employment.• Turnover was below the VAT threshold.• Coronavirus Support Payments were claimed on SA return but not claimed on HMRC internal system.[36]On 14 February 2023 the Appellant provided a response to HMRC’s information request in which he confirmed that the self-employed income was £90,223 instead of £84,202, with the balance being from their property rental income, that he owned two properties and that he did not receive any coronavirus support payments. The Appellant provided a breakdown of his income and expenses.[37]Ms Watkiss undertook a further review and sought more information from the Appellant who explained that the error in turnover was due to a clerical mistake. As an enquiry had been opened, no amendment to the return could be made. He further explained that subcontractor costs related to translation, proofreading, and administrative work conducted by his wife, Noor Makarem, and daughter, Farah Maasher. Mrs Makarem was paid £12,000 for translation and proofreading works and Miss Maasher was paid £6,000 for clerical work and English proofreading. The legal expense of £1,114 were payments to solicitors Clifford Johnson & Co in relation to an eviction legal case against a tenant. The error in the property income declared occurred as the balance was initially put into rent income by mistake and the error in the property expense was a mistake.[38]On 4 August 2023 Ms Watkiss issued the first pre-closure notice as follows:• Turnover increased from £84,202 to £90,233.08• Expenses decreased from £41,663 to £19,539.80• Property income decreased from £14,438 to £8,437.24[39]Ms Watkiss concluded that the Appellant had not provided sufficient evidence to support claims in respect of subcontractor costs, legal expenses, property expenses, travel expenses, use of home, phone, postage, stationery and consequently she reduced the allowable expenditure.[40]On 30 September 2023 the Appellant provided further information regarding payments to his wife and daughter and the tenant who was evicted following a court order which related to the property expenses for damage caused by the tenant and consequential legal proceedings.[41]On 4 December 2023 Ms Watkiss conducted a telephone interview with the Appellant. She noted that during the enquiry period the Appellant was employed full-time as a translator and his office was in Salisbury. During lockdown the Appellant worked from home and as restrictions lifted, the Appellant would visit the office once a month, then once a month for five days travelling by car. The Appellant explained that the travel expenses were for snacks and coffee and that some of the figures were estimates as he did not have individual receipts. He confirmed that the car was solely for business use and that he has another car for private use. His mobile phone was also solely for business use. The Appellant confirmed that the £18,000 subcontractor costs were payments to his wife and daughter; their employment was an informal agreement and there were no time sheets, rotas or payslips.[42]On 5 December 2023 Ms Watkiss updated her risk review and increased the allowable expenditure to £23,722.77.[43]On 21 December 2023 Miss Watkiss consulted the HMRC manuals to confirm whether broadband, home insurance and charitable donations were allowable, She noted the Appellant had apportioned his ‘use of home’ expense by one third (which included use by Mr Maasher, Mrs Makarem and Miss Maasher). As it was a five bedroom property, she apportioned the ‘use of home’ expenditure by a fifth instead of a third, assuming one of the rooms was used as an office space.[44]On 9 January 2024, Ms Watkiss issued her second pre-closure notice as follows:• She advised Mr Maasher that subcontractor costs were disallowed because subcontractor costs are only allowable if a person is registered to the Construction Industry Scheme (CIS). There were no records of rotas, time sheets, or payslips for Mr Maasher’s wife or daughter.[45]On 9 March 2024 Mr Maasher provided his response which included property invoices, receipts for chocolate bars, receipt for road tax paid at the post office, floor plan, receipts for a laptop and credit card statements. Mr Maasher stated that the property had three bedrooms and that his wife and daughter use their bedrooms for conducting their work.[46]On 15 March 2024, Miss Watkiss concluded she could accept the petrol expenses that correlated with the credit card statements.[47]On 19 March 2024 Ms Watkiss issued the final closure notice. The difference between the original SA return and Miss Watkiss’ amendment was £12,990.13. The amendment reflected Miss Watkiss’ conclusions as follows:• Subcontractor costs were disallowed as there was no evidence in the form of payslips, time sheets and rotas.• Use of home was apportioned by a fifth.• An apportioned amount was allowed for broadband, council tax, rent, home insurance, and water• The depreciation and loss on sale of the car is allowable but should have been claimed under Capital Allowances on the return.• Hotel accommodation was allowed.• Expenses were allowed where receipts were provided and Ms Watkiss accepted they were wholly for business use.• Petrol expenses were not allowed as credit card statements showed petrol expenses of around £50 within a day of each other and during the telephone interview with the Mr Maasher, he stated that he was not travelling frequently to Salisbury due to the pandemic. Therefore, Ms Watkiss concluded that these expenses were not wholly for business use.• The claim for car insurance was accepted as the Appellant stated in the telephone interview that the car was wholly used for business.• Supermarket shopping costing around £40-£50 was not allowed as there were no accompanying receipts.[48]In summary:• Turnover increased from £84,202 to £90,233.08• Expenses decreased from £41,663 to £15,051.51• Travel Expenses of £4,711.65 allowed• Use of home allowed in the sum of £1,863.28• Charity expenses allowed of £1,320• Professional fees allowed of £1,114• Phone, Postage and Stationery allowed in the sum of £2,011.73• Capital Allowances allowed in the sum of £4,030.85• Laptop allowed in the sum of £470.85• Depreciation of Loss on Car Sale of £1,600• Loss on Car Sale allowed in the sum of £3,560• Property Income decreased from £14,438 to £8,437.24• Legal, management and other professional fees decreased from £5,000 to £1,440• Increase in rent, rates, insurance and ground rents from £800 to £826.12• Increase to property repairs and maintenance from £2,200 to £4963.56[49]In oral evidence, Ms Watkiss clarified that she had not been responsible for the final closure notice issued and she could not give any evidence about decisions made by her colleagues after her involvement.[50]She explained that she had believed expenses for charity donations were allowable as that was her interpretation of the legislation and she could not explain why it had been disallowed on review.[51]Ms Watkiss stated that in relation to petrol expenses she had wanted to see mileage records from A to B in order to correlate the expenses with the bank statements. The expenses had been allowed where she could correlate the amounts. Ms Watkins explained that she had only used the information of Mr Maasher travelling to his office once per month, then five times per month and as she was not aware of the Appellant’s other work attending police stations and courts, although she believed Mr Maasher had mentioned work in Sheffield and there were train tickets supporting that.[52]HMRC’s clarified in its Statement of Case that in his review request dated 15 April 2024, Mr Maasher provided evidence of emails he sent to his wife and daughter, containing attachments and/or links instructing them to carry out the translation and proofreading work as required, however the content of the attachments was blocked. Ms Watkiss said this postdated her involvement and therefore she had not seen or considered the emails. Although she saw evidence of work allocation, she had seen no formal arrangements or payslips. Ms Watkiss agreed there was no legal requirement for formal records, however there needed to be substantial evidence of calculations for her to conclude that any payments satisfied the wholly and exclusively test.[53]Ms Watkiss accepted that she had been incorrect to advise Mr Maasher that his claim for subcontractors was disallowed on the basis that he was not registered for CIS, however that was her understanding at the time.[54]In relation to the increased figure sought by HMRC, Ms Watkiss clarified that she could not comment on the figure as her evidence only related to the figures contained in the closure notice she had issued and not different figures reached by her colleagues.[55]We had the benefit of a witness statement from Mr Maasher dated 4 September 2025 and a supplementary bundle containing an amended witness statement dated 5 May 2026.[56]Mr Maasher’s written evidence explained that during the 2020-2021 tax year he was working as a self-employed Arabic interpreter and translator for multiple clients. His main clients included courts, police stations, solicitors' offices, and other public bodies requiring Arabic interpretation services. In oral evidence, Mr Maasher explained that he would travel to different locations depending on assignments. He also held a full-time contract with Prestige Network Limited to provide translation services for DSTL (Defence Science and Technology Laboratory) in Kent.[57]As the DSTL contract was demanding and time-consuming and Mr Maasher was working full time, combined with maintaining other freelance clients, he could not manage the workload alone and delegated work to his wife and daughter.[58]Mrs Makarem is fully bilingual in Arabic and English and had the skills necessary to assist with translation and proofreading work. Miss Maasher was also able to assist with English proofreading and document preparation.[59]Mrs Makarem was paid £12,000 during the 2020-2021 tax year. Her work included reviewing and proofreading English translations Mr Maasher had produced, translating English documents into Arabic on his behalf, reviewing translation requests from clients and preparing responses and reviewing completed translation documents before they were sent to clients. She also assisted with correspondence and document preparation.[60]Communication was primarily by email; Mr Maasher would send documents to Mrs Makarem with instructions, and she would return the completed or reviewed work by email. Mr Maasher’s written evidence was supported with exhibits, for example a bank statement extract showing a transfer of £1,000 made by Mr Maasher to Mrs Makarem on 8 July 2020 with the reference "SERVICES". The statement shows two further payments in the same period labelled as charity payments. Mr Maasher explained that the use of the reference "SERVICES" and “charity” for the payments demonstrates that he understood and maintained a clear distinction between personal or charitable payments and payments made for services rendered.[61]There were also 3 “Translation Return Emails — Noor Makarem to Mohammed Maasher” comprising 15 emails from Mrs Makarem's Yahoo Mail account to the Mr Maasher’s email address each containing a completed translation document as an attachment covering the period April 2020 to February 2021 which he explained showed evidence of Mrs Makarem returning completed work throughout the year. Mr Maasher also provided a “Correlated Email Schedule” which cross-referenced the work assignment emails he sent to Mrs Makarem with the return emails and which showed 15 matched pairs.[62]In relation to the lack of timesheets, payslips or rotas, Mr Maasher explained that Mrs Makarem was not his employee, rather she was a freelance subcontractor. He did not operate a formal payroll for her and self-employed freelancers are not required by law to have timesheets or payslips. He confirmed that pursuant to section 34 ITTOIA 2005 the expenses were wholly and exclusively for the purposes of his trade. In oral evidence, Mr Maasher explained that he kept a record of work done by the emails sent and those returned to him with pieces of work. The income he generated outside of his full time job would not have been possible without the assistance of his wife and daughter. He highlighted that the records were sufficient for his wife to have declared the payment of £12,000 in her tax return, which supports his evidence that this was the amount she received as payment for the subcontracted work.[63]Mr Maasher confirmed that he paid his daughter £6,000 during the 2020-2021 tax year. She also worked on a freelance basis and was not a formal employee. The work included proofreading English documents for grammar, clarity and accuracy before submission to clients, organising and preparing documents, assisting with correspondence and supporting the administrative side of the business Miss Maasher also assisted with legal documents during the eviction litigation. By agreement, Mr Maasher kept the payments owed until such time as required and subsequently made payment by purchasing a car in Ms Maasher’s name in October 2022. He clarified that the obligation to pay her arose during 2020-2021, and the car purchase was how that obligation was eventually settled; the car logbook was provided as evidence of the purchase.[64]In relation to the property expenses of £2,500 and £166.25, these arose from Mr Maasher’s rental property in Manchester, which he has owned since 2012. During 2020-2021 there was a deeply problematic tenant. Mr Maasher was empathetic to the tenant’s situation as a Syrian refugee, however the tenant caused significant damage and deliberate vandalism to the property, refused to leave despite a court order and the eviction process took three years.[65]The expenses claimed of £2,500 and £166.25 represent payments made to individuals who assisted with property management, mediation, and coordination of repairs during this period. As Mr Maasher had attempted to resolve the matter informally to avoid the cost of litigation during the pandemic, the payments were made informally to people who helped communicate with the tenant, oversee repair work, and manage the property in Mr Maasher’s absence. Mr Maasher provided WhatsApp messages, police reports, court orders, and council correspondence as evidence of the circumstances. He confirmed that the expenses were wholly and exclusively incurred for the purpose of managing the rental property and protecting his ability to generate rental income from it.[66]Mr Maasher raised a number of issues of unfairness he felt had impacted on these appeal proceedings. He noted that HMRC had informed him in the pre-closure notice of 9 January 2024 that subcontractor costs were only allowable if he was registered under CIS which was wholly incorrect and has no relevance to his case. As a result, the true legal position – namely the wholly and exclusively test – was never set out for him. He submitted that the closure notice was therefore issued following a process in which HMRC had materially misled him about the applicable law at the critical moment.[67]Furthermore, Mr Maasher was never informed that the email attachments submitted as evidence of subcontracted work were blocked and had not been reviewed. This was only discovered when HMRC served its Statement of Case. As a result, HMRC drew adverse conclusions from evidence they had never examined, did not tell Mr Maasher they could not access the emails and did not give him the opportunity to resubmit the evidence.[68]Mrs Mackarem and Miss Maasher both provided witness statements dated 3 September 2025 in which they confirmed the work they undertaken and that the emails provided were further confirmation of this.[69]In oral evidence, Miss Maasher confirmed that her father had purchased a car in her name as payment. She added further details of the type of tasks she had undertaken which included proofreading, administrative tasks such as taking client calls and organising her father’s diary when he was away. She had also been involved in the rental property by responding to emails from solicitors during the eviction process and the tradesmen who carried out repair works. Submissions Appellant’s

Submissions

[70]We should commend Mr Maasher’s son who made oral closing submissions on his fathers’ behalf. The submissions were eloquent and persuasive and, in the main, we agreed with them.[71]It was highlighted that HMRC’s position as to the amount of any liability remained unclear; three different figures were proposed. Mr Maasher has already paid £16,000 in good faith and on HMRC’s revised figure a refund is due.[72]The Tribunal is entitled to consider the factual accuracy of HMRC’s risk assessment as the initial reasons given for opening the enquiry were without substance. The enquiry ultimately pursued expense claims that were not among the original risk indicators[73]Mr Maasher submitted that although the different figures may not affect the validity of the closure notice, the variations and recalculations undermine the reliability of HMRC’s case as a whole. Three officers have reached three different conclusions on the same facts and applying the same law. Mr Maasher (junior) queried how HMRC could seek a further variation when Ms Watkiss was unable to provide any evidence on the issue and her evidence supported her conclusions and not those of her colleagues. It was submitted that HMRC are asking the Tribunal to go beyond the facts that their evidence supports.[74]Mr Maasher produced an abundance of evidence in support of work subcontracted which showed a clear pattern of emails/work sent and returned. HMRC failed to have regard to this evidence which was a record of work subcontracted in circumstances where there is no legal requirement for rotas or payslips.[75]There have been numerous procedural failures by HMRC including the failure to inform Mr Maasher that the email attachments were blocked until the Statement of Case was filed and the application of the incorrect law by advising Mr Maasher that he should be register under CIS.[76]A penalty was imposed despite Mr Maasher’s compliance with an Information Notice, his cooperation and the evidence provided.

HMRC’s submissions

[77]Mr Elliott submitted that the variation to the closure notice does not affect its validity. He highlighted that taxpayers are required to keep records in order to submit accurate returns.[78]The email evidence of subcontracted work does not confirm that the work was carried out, just that assignments were given. Similarly, the log book for Miss Maasher’s vehicle is not evidence of payment. The use of home and related expenses relies on the evidence relating to subcontracted work.[79]There is insufficient documentary evidence to demonstrate that travel and subsistence expenses claimed were wholly and exclusively for the purpose of the trade; they were therefore correctly disallowed.[80]Various other expenses were allowed save for those where there was insufficient evidence to satisfy the wholly and exclusively test or where there were no records of payments.

Discussion and Decision

[81]The Closure Notice was issued on 19 March 2024. It informed Mr Maasher that the officer had completed her enquiries. It set out the officer’s conclusions and made the amendments to the return required to give effect to those conclusions. We were therefore satisfied that the closure notice meets the requirements of Section 28A(1B) and (2) TMA 1970.[82]The burden then falls to Mr Maasher to establish that the amount charged by the closure notice is incorrect. For the reasons set out below, we were wholly satisfied that Mr Maasher had discharged that burden.[83]We found Mr Maasher, Mrs Makarem and Miss Maasher to be entirely credible witnesses. In our view their evidence was honest and reliable, and we accepted it in its entirety.[84]We pause to note at this point that we found HMRC’s case inconsistent and unclear. Miss Watkiss who gave evidence was responsible for issuing the closure notice. However, after she ceased to be involved, two further officers, Ms Townsend and Ms Sutton, took different views on many of the items which form the basis of this appeal. Neither Ms Townsend nor Ms Sutton gave evidence, and it therefore appeared to us that HMRC were relying on the evidence of Miss Watkiss. However, as Miss Watkiss accepted in evidence, she could not speak to the views of her colleagues, nor could she give any evidence about the increase to the closure notice sought by HMRC. This appeared to us at odds with HMRC’s Statement of Case which stated that there were errors in the calculations of Ms Watkiss and Ms Townsend which led to the recalculations, yet there was no witness on behalf of HMRC to give evidence about the errors, the recalculations relied upon and, as a result, there was no opportunity for Mr Maasher to challenge the calculations.[85]Moreover, Mr Maasher had provided further evidence in the form of emails with attachments after Miss Watkiss had ceased to be involved. The Statement of Case records that the attachments/links were blocked and goes on the state: “Regardless of the content of the emails…” from which we inferred that no consideration had been given to that evidence. In our view, the failure to consider evidence provided by any appellant is contrary to the overriding objective and in this case, showed a disrespectful disregard to both Mr Maasher and the appeal process as a whole.[86]We now turn to the various items in dispute. Mr Maasher, sensibly in our view, invited us to focus our attention on the subcontractor and property expenses as the two principal figures in issue.[87]We accepted the oral and written evidence that Mr Maasher subcontracted work to Mrs Makarem and Miss Maasher. We found that the emails exhibited supported that evidence and demonstrated the types of work undertaken, in addition to other tasks such as diary management and assisting with arranging repairs to the rental property. It is regrettable that Mr Maasher was initially given incorrect advice regarding the construction industry scheme, which is clearly not applicable in his case, and it is to Mr Maasher’s credit that he continued to challenge HMRC’s decision in spite of this. There is no legal requirement for payslips or timesheets and we accepted Mr Maasher’s evidence that the emails provided sufficient records from which he was able to give reliable evidence of the payments made for the work. We also consider that the income declared by Mrs Makarem on her tax return was consistent with the figure claimed by Mr Maasher and we had no hesitation in accepting it as accurate. Similarly, we were satisfied that the evidence of the log book supported the evidence of Mr Maasher and Miss Maasher’s that the latter was paid £6,000 for her work and that the payment was made by the purchase of a car.[88]We were satisfied that the expenses were incurred wholly and exclusively for the purposes of Mr Maasher’s work and that they were allowable.[89]The consequence of our finding on the subcontractor issue also affects expenses claimed for use of home, rent, bills, broadband and related ancillary expenses which HMRC reduced by apportioning to one fifth. We consider that the apportionment of one third was correct as claimed by Mr Maasher.[90]In relation to property expenses, HMRC allowed those which were identified on bank and credit card statements in addition to legal expenses incurred and an insurance cost. The remainder were disallowed.[91]We accepted Mr Maasher’s oral evidence that the amounts claimed related to repairs required as a result of the damage caused by the evicted tenant and that some of the additional repair costs were paid in cash and without formal receipts, as is common in small-scale property maintenance. We considered that this evidence was supported by Miss Maasher’s oral evidence in which she described assisting her father in arranging those repairs and also by the WhatsApp messages exhibited by Mr Maasher which clearly demonstrated that he was in constant contact with people who were carrying out the repairs. In those circumstances, we found that the legal test was satisfied and the expenses should not have been disallowed.[92]HMRC allowed expenses claimed for car tax on the basis that it was more likely than not that “the tax was for the Appellant’s business vehicle”. Mr Maasher had confirmed to Miss Watkiss in the telephone interview that he used this vehicle solely for work and that he had a separate car which was for personal use. In those circumstances, we found the review conclusion letter was inconsistent with the acceptance that the vehicle was a “business vehicle” when the letter stated:
“itis more likely than not, that you had incurred travel expenses in relation to your trade; purchases of fuel and travel tickets are shown on your credit card statement. It is not possible however, to determine which of these relate solely to your business. Therefore, all travel costs are disallowed.”
[93]Furthermore, we consider that having allowed Mr Maasher’s accommodation expenses on the basis that he was in Salisbury for business, it seemed to us illogical for HMRC not to accept that the travel to get there was equally for business.[94]We consider that, having accepted Mr Maasher’s evidence that the car was used only for work purposes, that all of the expenses therefore satisfied the wholly and exclusively test.[95]We considered Miss Watkiss’ evidence that she had allowed the expenses where she could correlate amounts to the bank statements but had disallowed those where she believed the expenses exceeded the number of times Mr Maasher travelled to the office in Salisbury. We consider that in reaching this conclusion, Miss Watkiss had failed to take into account the information Mr Maasher had provided during the telephone interview on 4 December 2023, the note of which recorded:
“self-employed Arabic translator who travels between court, the police station and solicitors’ office to provide translation services….MM explained that his wife helps with the translation work for courts, police whilst he was employed full-time at DTSL (Defence Science and Technology Laboratory)”
[96]This evidence was supported by the emails provided by Mr Maasher which confirmed that he had undertaken such work during the relevant period and invoices for those services were recorded in the bank statements.[97]We accepted that the expenses claimed by Mr Maasher in relation to travel and subsistence were incurred wholly and exclusively for the purposes of his work providing translation services and the expenses should therefore have been allowed.[98]We agreed with HMRC’s position that charity donations can only be claimed as a business expense if the costs incurred are wholly and exclusively for the purposes of the trade. The expenses, which were initially allowed by Miss Watkiss, were subsequently disallowed. At the hearing Mr Maasher did not pursue any argument that the charity donations were wholly and exclusively for the purposes of his self-employment, rather his submission was that once an expense has been expressly allowed by HMRC and the taxpayer has relied on that allowance, removing it on review is procedurally unfair. We were sympathetic to Mr Maasher’s frustration at the inconsistent views taken by HMRC and we noted that he felt this added to the unfairness in the proceedings, however in applying the legal test of wholly and exclusively, we concluded that the expenses must be disallowed.[99]We should note that Miss Stott asked Miss Watkiss if the disallowed charity donations had been reallocated to the Gift Aid claim box on the self-assessment return, which would give Mr Maasher higher rate tax relief. Miss Watkiss did not know the answer.[100]Ms Watkiss had concluded that the depreciation and loss on sale of Mr Maasher’s car was allowable, but it should have been claimed under Capital Allowances. On review, HMRC took a different view, stating that:
“You had provided a purchase invoice for a vehicle in 2019. Based on that invoice, the amount claimed on the depreciation of the value of the car is correct, even if it was not claimed as a Capital Allowance. It is reasonable to allow this in the value of £1,600. There are also claims for depreciation on the loss following the sale of the car in 2020-2021, and a laptop. I have seen no evidence, in the way of invoices, sales receipts to support these claims, and they are therefore disallowed.”
[101]We consider that this cannot be correct. HMRC's own Statement of Case shows that clear evidence had been provided for all three items. We consider that an adjustment should be made to reflect capital allowances on the new car and laptop together with a balancing allowance for the loss on sale of the old car.[102]The final figure in dispute related to £240 paid out to Hip and Knee L Bowdown in September 2020. No oral evidence was given about this and it appears from a letter in the bundle dated 29 September 2023 from Mr Maasher to Ms Watkiss that it related to a knee specialist. Ms Watkiss’ Risk Intervention Plan dated 15 March 2024 records:
“Customer thought that, because he had knee problems and due to long distance travelling for work, that this was an allowable expense. I have not allowed for this.”
[103]Whilst the injury may have been caused by Mr Maasher’s travel for work, we were not able to conclude that the payment was a professional membership fee or subscription relevant to Mr Maasher’s work and therefore we concluded that the expense was not incurred wholly and exclusively for the purpose of the trade and we agreed that this amount should be disallowed.

Penalty

[104]As we understand the position, a penalty was imposed for careless behaviour. HMRC did not advance any case in relation to the penalty, but we understood the appeal to include it. Given that it is unclear whether HMRC’s position is that the penalty stands or falls with the substantive decision, we direct the parties to liaise and confirm the position to the Tribunal within 28 days.[105]We simply make the following comments: the penalty appears to have been imposed primarily as a result of expenses being claimed that were disallowed. Our findings are that those expenses were, in the main, allowable and we accepted the Appellant’s evidence (raised at the very start of the enquiry) that there had been a clerical error in the income declared on the return which had been declared as property income. We also note that the penalty was not suspended despite HMRC’s view that “arguably conditions can be imposed which will help avoid penalties for careless inaccuracies in the future”. The reason for not suspending the penalty was that the discrepancy between expenses claimed and those allowed was too great. Again, this is not reflected by our findings and therefore it is arguable that the basis for the imposition of the penalty is flawed.

Conclusion

[106]The appeal is allowed in part.[107]It is directed that within 28 days the parties must confirm to the Tribunal whether the issues of quantum and the penalty have been agreed or whether a further hearing is required.

Right to apply for permission to appeal

[108]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. Release date: 18 June 2026