Sharif v Revenue & Customs (INCOME TAX, CLASS 4 NATIONAL INSURANCE CONTRIBUTIONS & STUDENT LOAN REPAYMENTS) [2019] UKFTT 278 (TC) (26 April 2019)

Sharif v Revenue & Customs (INCOME TAX, CLASS 4 NATIONAL INSURANCE CONTRIBUTIONS & STUDENT LOAN REPAYMENTS) [2019] UKFTT 278 (TC) (26 April 2019)

The Tribunal found that HMRC's calculations of omitted sales were partly incorrect, as some deposits were explained by the appellant and not all unexplained deposits could be attributed to omitted sales. The Tribunal recalculated the profit from omitted sales, reduced the tax and NICs accordingly, and found that the penalties for deliberate conduct were not fully justified due to lack of sufficient evidence. The appeals were allowed in part for the car sales (2013-14) and fully for the takeaway business (2007-08 to 2012-13).

Citation
[2019] UKFTT 278 (TC)
Parties
Appellant: Sirforaz Sharif; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
26 April 2019
Procedural Posture
Tax Appeal / First Tier Tribunal (tax) Substantive Decision
Outcome
Appeals allowed in part (car sales 2013-14); all appeals allowed (takeaway 2007-08 to 2012-13)
Legal Topics
Income Tax, National Insurance Contributions, Student Loan Repayments, Discovery Assessments, Penalties for Deliberate Conduct, Closure Notices
Tax Law Income Tax National Insurance Contributions Student Loan Repayments Discovery Assessments Penalties for Deliberate Conduct Closure Notices

Case Brief

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Parties

Sirforaz Sharif

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal (tax) Substantive Decision

Legal Issues

  1. 1 Whether there were omissions of sales in the appellant's used car and takeaway businesses for the relevant tax years
  2. 2 Whether the amendments to the tax return and discovery assessments were correct
  3. 3 Whether penalties under Schedule 24 FA 2007 and s 95 TMA were due for deliberate or fraudulent conduct

Ratio Decidendi

The Tribunal found that HMRC's calculations of omitted sales were partly incorrect, as some deposits were explained by the appellant and not all unexplained deposits could be attributed to omitted sales. The Tribunal recalculated the profit from omitted sales, reduced the tax and NICs accordingly, and found that the penalties for deliberate conduct were not fully justified due to lack of sufficient evidence. The appeals were allowed in part for the car sales (2013-14) and fully for the takeaway business (2007-08 to 2012-13).

Court Disposition

Appeals allowed in part (car sales 2013-14); all appeals allowed (takeaway 2007-08 to 2012-13)

Orders

  • Amendments to the 2013-14 tax return reduced; tax and NICs recalculated as per Tribunal's findings
  • Penalties for 2013-14 reduced or cancelled as per recalculated liability