Hussein v Revenue & Customs [2014] UKFTT 307 (TC) (25 March 2014)

Hussein v Revenue & Customs [2014] UKFTT 307 (TC) (25 March 2014)

The Tribunal found that the appellant had understated sales and purchase costs in his records and that the only plausible reason was to dishonestly evade VAT. The evidence, including discrepancies between import records and the Account Book, lack of credible explanation, and absence of proper records, established...

Source-derived case information.

Citation
[2014] UKFTT 307 (TC)
Parties
Appellant: Mr Salah Mohamed Hussein t/a Eastern Orbit; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
25 March 2014
Procedural Posture
VAT Civil Evasion Penalty Appeal / First Tier Tribunal (tax) Substantive Judgment
Outcome
Appeal allowed in part
Legal Topics
VAT, Civil Evasion Penalty, Dishonesty, Assessment of Tax, Mitigation of Penalty
Tax Law VAT Civil Evasion Penalty Dishonesty Assessment of Tax Mitigation of Penalty

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Parties

Mr Salah Mohamed Hussein t/a Eastern Orbit

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Civil Evasion Penalty Appeal / First Tier Tribunal (tax) Substantive Judgment

Legal Issues

  1. 1 Whether the appellant understated sales for VAT purposes
  2. 2 Whether there was dishonest evasion of VAT
  3. 3 Whether the VAT and penalty assessments were excessive

Ratio Decidendi

The Tribunal found that the appellant had understated sales and purchase costs in his records and that the only plausible reason was to dishonestly evade VAT. The evidence, including discrepancies between import records and the Account Book, lack of credible explanation, and absence of proper records, established dishonest evasion of VAT from 1 April 2005 to 28 February 2008. However, there was insufficient evidence of dishonesty prior to 1 April 2005. The Tribunal accepted the respondents' calculations as the best available estimate but found the assessments excessive in part and allowed the appeal to that extent.

Court Disposition

Appeal allowed in part

Orders

  • VAT and penalty assessments reduced to reflect findings on quantum and period of dishonest evasion
  • No finding of dishonest evasion prior to 1 April 2005