Hague v Revenue And Customs (INCOME TAX & CAPITAL GAINS TAX - meaning of 'discover') [2024] UKFTT 139 (TC) (19 February 2024)

Hague v Revenue And Customs (INCOME TAX & CAPITAL GAINS TAX - meaning of 'discover') [2024] UKFTT 139 (TC) (19 February 2024)

The Tribunal found that HMRC's officer subjectively believed, and a reasonable officer could objectively believe, that there was an insufficiency of tax based on unexplained bank credits and admissions of work at the New Tyke Pub. The discovery assessments and penalties were validly raised under s29(1) TMA and relevant penalty provisions. The appellant failed to discharge the burden of proving the contrary or providing credible evidence that the credits were non-taxable. The quantum of assessments and penalties, as revised by HMRC, was upheld.

Citation
[2024] UKFTT 139
Parties
Appellant: Steven Hague; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
19 February 2024
Procedural Posture
Tax Appeal / First Tier Tribunal Judgment
Outcome
Appeal dismissed
Legal Topics
Income Tax, Capital Gains Tax, Discovery Assessments, Penalties for Failure to Notify, Time Limits for Assessments, Burden of Proof, Subjective and Objective Tests Under S29 TMA
Tax Law Income Tax Capital Gains Tax Discovery Assessments Penalties for Failure to Notify Time Limits for Assessments Burden of Proof Subjective and Objective Tests Under S29 TMA

Case Brief

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Parties

Steven Hague

Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Judgment

Legal Issues

  1. 1 Whether HMRC validly made discovery assessments under s29(1) TMA where no returns were filed
  2. 2 Whether the subjective and objective tests for 'discovery' were met
  3. 3 Whether time limits for assessments were properly extended under s36 TMA

Ratio Decidendi

The Tribunal found that HMRC's officer subjectively believed, and a reasonable officer could objectively believe, that there was an insufficiency of tax based on unexplained bank credits and admissions of work at the New Tyke Pub. The discovery assessments and penalties were validly raised under s29(1) TMA and relevant penalty provisions. The appellant failed to discharge the burden of proving the contrary or providing credible evidence that the credits were non-taxable. The quantum of assessments and penalties, as revised by HMRC, was upheld.

Court Disposition

Appeal dismissed

Orders

  • Discovery assessments for 2007-08 to 2015-16 stand good in the revised quantum of £67,177.01
  • Penalties for failure to notify liabilities under s7 TMA and Sch 41 FA 2008 stand good in the revised quantum of £43,665.06