Hairdresser blames accountant for £110k CGT dispute

Hairdresser blames accountant for £110k CGT dispute

Apr 23, 2024

Peckham hairdresser has capital gains tax (CGT) appeal struck out for the second time after his accountant gave up on the case

David Henry sold a property on Peckham High Street on 9 November 2015, reporting a capital gain three years later. However, HMRC caught up with Henry five years later on 19 August 2020 with a closure notice, amending the tax payable to £110,990.

HMRC was aware of the sale from Land Registry records, with the investigating officer attempting to make contact with Henry on 27 October 2017 to notify him of his obligation to file a tax return for 2015-16. This was followed up on two more times before an enquiry was opened in 2018.

On 27 April 2021, Henry appealed to the First Tier Tribunal against this and the amendments to his self assessment tax return.

The return was completed by the appellant’s accountant, James Wright-Anderson ACCA who ‘repeatedly failed to comply with the tribunal’s direction’ with the first appeal being struck out on 27 October 2022. Both the appellant and the accountant were informed and updated on the requirements for a new application.

Before the application was struck out, Wright-Anderson asked for an extension of 90 days to gather additional evidence for Henry. These 90 days passed by, forcing HMRC to make contact once again.

Wright-Anderson responded by saying: ‘We have repeatedly stated that we wish to have the matter proceed to a full hearing as our client has no further written evidence beyond those already supplied to yourselves!’

Instead of responding to the struck-out appeal a new appeal was then submitted on 10 January 2023 against the original closure notice, with no amendments to the grounds of appeal. HMRC once again applied for this to be struck out.

Wright-Anderson then stopped responding to his client, until Henry employed a new accountant, Abiodun Albert Adeboyejo. However, Adeboyejo refused to attend the FTT due to not being familiar with the case. Henry then sought help from a friend, Jacqueline Anderson, who is an English teacher, to represent him at the tribunal.

Anderson asked for the hearing to be adjourned so Henry could seek new representation, or so his new accountant could get up to speed with the case, this was declined by tribunal judge Anne Redston but described Anderson as ‘competent’ despite the fact she had no tax or accountancy experience.

The appeal to adjourn the hearing was denied as Henry had over a year to prepare and the new representative had ‘no good reason’ to not be ready for a hearing.

Anderson attempted to say there was a ‘special reason’ why Henry should be allowed to appeal once again. She claimed Henry was not fully aware of the failures by Wright-Anderson as all of the correspondence was going to him. Judge Redston agreed with Anderson but stated: ‘Tribunal rules allows the tribunal to communicate with the appointed representative and not to copy the litigant.

‘The normal practice of the tribunal, once a representative is appointed, is to send communications only to that person. In addition, Mr Henry received the strike-out letter of 27 October 2022 which explained the action to take; but he had simply given it to Mr Wright-Anderson.’

Henry asked the tribunal if any action could be taken against Wright-Anderson, but due to him not being a chartered tax adviser, they could not. He is however a member of ACCA.

Judge Redston added: ‘Complaints about poor advice given by an ACCA member must be made first to the person in question and can then be referred to the ACCA itself.

‘But it is Mr Henry who would need to take that action; the tribunal cannot step into his shoes, or act on his behalf.’