Smith v Revenue and Customs (INCOME TAX and VAT) [2026] UKFTT 663 (TC) (06 May 2026)

Smith v Revenue and Customs (INCOME TAX and VAT) [2026] UKFTT 663 (TC) (06 May 2026)

The Tribunal found that HMRC's discovery and best judgment assessments were valid and in time. The appellant continued to carry on the business as principal after the purported sale in March 2003, and the income was properly attributable to him. However, the Tribunal found that the assessments overcharged the appellant and directed recalculation. The appellant's behaviour was deliberate or fraudulent, justifying penalties. HMRC's conduct did not amount to an abuse of process, and the appellant received a fair trial.

Citation
[2026] UKFTT 663
Parties
Appellant: John Smith; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
06 May 2026
Procedural Posture
Tax Appeal (income Tax and Vat) / First Tier Tribunal (tax Chamber) Judgment
Outcome
Appeals largely dismissed
Legal Topics
Income Tax, VAT, Discovery Assessments, Best Judgment Assessments, Penalties, Tax Residency, Abuse of Process, Burden of Proof
Tax Law Income Tax VAT Discovery Assessments Best Judgment Assessments Penalties Tax Residency Abuse of Process +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 11 Party arguments 2 Amounts and remedies 28
Sign in to unlock

Parties

John Smith

Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

Tax Appeal (income Tax and Vat) / First Tier Tribunal (tax Chamber) Judgment

Legal Issues

  1. 1 Whether HMRC's discovery and best judgment assessments were valid and in time
  2. 2 Whether the appellant continued to carry on the accountancy business as principal after the alleged sale in March 2003
  3. 3 Whether the appellant's income was understated and properly attributable to him

Ratio Decidendi

The Tribunal found that HMRC's discovery and best judgment assessments were valid and in time. The appellant continued to carry on the business as principal after the purported sale in March 2003, and the income was properly attributable to him. However, the Tribunal found that the assessments overcharged the appellant and directed recalculation. The appellant's behaviour was deliberate or fraudulent, justifying penalties. HMRC's conduct did not amount to an abuse of process, and the appellant received a fair trial.

Court Disposition

Appeals largely dismissed

Orders

  • Directions for recalculation of the tax and penalties to follow