There are special rules for people working in the UK on short-term secondment from employers based abroad. Many do not become taxpayers under the UK tax system.

When one such person contacted HM Revenue and Customs (HMRC) to clarify his position, he was told that as he earned less than £100,000 in a tax year, he would not have to file a UK tax return. He also enquired about the deductibility of various expenses such as rent and maintenance and was told that if he were a UK taxpayer, these would not be deductible.

When his earnings passed £100,000, he submitted a tax return. However, he also claimed as deductions expenses he had been told were not tax deductible. HMRC disallowed the incorrectly claimed expenses and, as well as a tax liability of £12,000, he was charged a penalty of £6,500 for submitting a deliberately incorrect return.

Even though HMRC reduced the penalty to £4,300, he still appealed against it, arguing that it was not a deliberate act but an innocent mistake. The First-tier Tribunal upheld the penalty. The fact that he had taken advice and still submitted an incorrect return meant that his ignorance of the UK tax system was not a reasonable excuse.