Mauheed Johngir & Anor v The Commissioners for HMRC
[2024] UKFTT 274 (TC)
Colm Brendan Malone v The Commissioners for HMRC
2 February 2023
[2023] UKFTT 98 (TC)
First-tier Tribunal
A business owner was fined for not reporting all of his sales. He claimed mistakes and damaged equipment, but the tax office showed he'd hidden sales. The judge sided with the tax office and kept the reduced fine.
Key Facts
- •Colm Brendan Malone (appellant) appealed two personal liability notices (PLNs) for penalties related to VAT and corporation tax inaccuracies of Maloney's Diner Limited (the Company).
- •The Company was liquidated and did not appeal the underlying assessments and penalties.
- •HMRC initially assessed VAT penalties at £139,902.72 and corporation tax penalties at £41,701.76.
- •HMRC, after reviewing evidence, recalculated the penalties to £45,507.84 (VAT) and £8,522.25 (corporation tax).
- •The appellant was the sole director and shareholder of the Company.
- •The Company consistently under-declared sales, evidenced by discrepancies between till data and reported sales.
- •The appellant did not fully disclose banking information to HMRC or his accountant.
- •The appellant argued that tills were damaged during an HMRC investigation, which the Tribunal rejected.
- •The appellant argued that sales from another business, Sasha’s Bistro, were included in the main till records; however, there was no supporting evidence.
- •The appellant's accountants ceased to act for him before the penalties were issued.
Legal Principles
Personal liability for company penalties under Schedule 24 Finance Act 2007.
Schedule 24 Finance Act 2007, paragraph 19(1)
Definition of 'deliberate inaccuracy' in tax returns.
Auxilium Project Management Ltd v HMRC [2016] UKFTT 249 (TC)
Burden of proof in tax assessments lies on the taxpayer to demonstrate the assessment is incorrect.
Bi-Flex Caribbean Ltd v The Board of Inland Revenue [1990] UKPC 35
Assertions from advocates are not evidence.
Edwards v HMRC [2019] UKUT 131 (TCC)
Outcomes
Appeal dismissed.
The Tribunal found that the appellant's actions resulted in deliberate and concealed inaccuracies in the Company's VAT and corporation tax returns. The Tribunal accepted HMRC's recalculated penalties.