In a case that involved a number of aspects, the First-tier Tribunal (FTT) allowed the taxpayer appeal with regard to the likely date on which a transfer of the business had taken place (Kingdon and others v HMRC  UKFTT 407 (TC)).
The FTT found that the appellants had not acted negligently. They had “put their financial and tax affairs in the hands of an ostensibly competent firm of local accountants and tax advisers … who initially demonstrated no lack of competence or ability.”
“have expertise in relation to drainage systems but none as regards financial, accounting, and tax matters. By placing those matters in the hands of [the accountants] they were behaving wholly responsibly, and with a view to their duties to the tax system, and to HMRC. This responsible behaviour continued when they sacked [the accountants]. They were entitled to rely on [the accountants] to act in their best interests as regards the compilation of returns and their submission to HMRC.”
There was no need, nor duty, for the taxpayers to question the competence of their professional advisers.
Related content from Claritax Books
Discovery Assessments, by tax barrister Keith Gordon, is a detailed, clearly written guide to the law and practice in this area. Based on the author’s personal involvement in many leading cases, the book contains much practical advice explaining when and how such assessments may be challenged.