Aziz v Revenue and Customs (INCOME TAX/CORPORATION TAX : Assessment/self-assessment) [2018] UKFTT 153 (TC) (21 March 2018)

Aziz v Revenue and Customs (INCOME TAX/CORPORATION TAX : Assessment/self-assessment) [2018] UKFTT 153 (TC) (21 March 2018)

The Tribunal found that Mr Aziz failed to displace HMRC’s findings of under-declared income and errors in record keeping. HMRC’s methodology for quantifying under-declared income, using merchant acquirer data and a card-to-cash split based on cash ups, was reasonable and sound. The presumption of continuity applied...

Source-derived case information.

Citation
[2018] UKFTT 153
Parties
Appellant: Shah Aziz; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
21 March 2018
Procedural Posture
Tax Appeal (income Tax, Vat, Penalties) / First Tier Tribunal (tax Chamber) Final Decision
Outcome
Appeal dismissed in respect of tax and VAT assessments (except for VAT period 07/11); penalty assessments varied.
Legal Topics
Income Tax, VAT, Self Assessment, Discovery Assessment, Penalties, Best Judgment Assessment, Presumption of Continuity, Record Keeping Requirements
Tax Law Income Tax VAT Self Assessment Discovery Assessment Penalties Best Judgment Assessment Presumption of Continuity +1 more

Source-derived case record

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 5 Authorities cited 12 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

Shah Aziz

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Tax Appeal (income Tax, Vat, Penalties) / First Tier Tribunal (tax Chamber) Final Decision

Legal Issues

  1. 1 Whether sales were under-declared by the appellant
  2. 2 Whether HMRC’s assessment of quantum was soundly based
  3. 3 Whether the discovery assessment for 2012 complied with section 29 TMA and presumption of continuity

Ratio Decidendi

The Tribunal found that Mr Aziz failed to displace HMRC’s findings of under-declared income and errors in record keeping. HMRC’s methodology for quantifying under-declared income, using merchant acquirer data and a card-to-cash split based on cash ups, was reasonable and sound. The presumption of continuity applied for the relevant years. VAT assessments were made to best judgment. However, HMRC did not prove that under-declarations were deliberate and concealed by Mr Aziz; his conduct was negligent and careless, not deliberate. Penalties should be recalculated at 19.5% for careless behaviour with prompted disclosure.

Court Disposition

Appeal dismissed in respect of tax and VAT assessments (except for VAT period 07/11); penalty assessments varied.

Orders

  • Income tax and class 4 NICs amendments and VAT assessments upheld in specified amounts, except VAT assessment for period 07/11 cancelled.
  • Penalty assessments varied: Mr Aziz liable to penalties at 19.5%.