Barkham v Revenue & Customs [2012] UKFTT 499 (TC) (14 August 2012)

Barkham v Revenue & Customs [2012] UKFTT 499 (TC) (14 August 2012)

The tribunal found that the appellant's declared turnover for 2004/05 was understated as it did not account for all cash receipts, and upheld the assessment for that year. However, for earlier years, the tribunal found the respondents' use of a 58% uplift based on the presumption of continuity to be unreasonable and unsupported by sufficient evidence, especially given the appellant's financial circumstances and market conditions. The tribunal therefore did not uphold the assessments for 2001/02, 2002/03, and 2003/04 and invited the parties to submit alternative figures.

Citation
[2012] UKFTT 499
Parties
Appellant: Andrew Barkham; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
14 August 2012
Procedural Posture
Income Tax/corporation Tax Assessment Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal allowed in part
Legal Topics
Income Tax, Corporation Tax, Discovery Assessments, Self Assessment, Presumption of Continuity, Taxable Turnover Calculation
Tax Law Income Tax Corporation Tax Discovery Assessments Self Assessment Presumption of Continuity Taxable Turnover Calculation

Case Brief

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Parties

Andrew Barkham

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax/corporation Tax Assessment Appeal / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether the profits in the accounts for the year ended 31 December 2004 were understated
  2. 2 Whether discovery assessments for earlier years were reasonable and fair

Ratio Decidendi

The tribunal found that the appellant's declared turnover for 2004/05 was understated as it did not account for all cash receipts, and upheld the assessment for that year. However, for earlier years, the tribunal found the respondents' use of a 58% uplift based on the presumption of continuity to be unreasonable and unsupported by sufficient evidence, especially given the appellant's financial circumstances and market conditions. The tribunal therefore did not uphold the assessments for 2001/02, 2002/03, and 2003/04 and invited the parties to submit alternative figures.

Court Disposition

Appeal allowed in part

Orders

  • Assessment for 2004/05 is upheld.
  • Assessments for 2001/02, 2002/03, and 2003/04 are not upheld; parties invited to submit alternative figures within three weeks.