Surat Singh Sangha v The Commissioners for HMRC
[2024] UKFTT 564 (TC)
Martin Horsler v The Commissioners for HMRC
17 June 2024
[2024] UKFTT 561 (TC)
First-tier Tribunal
A taxpayer didn't give HMRC all the documents they requested. HMRC fined him. He argued the request was unfair and he couldn't get the documents. The court said HMRC was right, the taxpayer could have gotten the documents, and his excuses weren't good enough. The fines stand.
Key Facts
- •HMRC issued an information notice under Schedule 36 Finance Act 2008 to Mr. Horsler regarding his tax position for 2018/19, concerning disguised remuneration and a 'Sunrise' arrangement.
- •Mr. Horsler initially sought and received extensions to comply but ultimately failed to provide all requested documents.
- •HMRC imposed initial and daily penalties for non-compliance.
- •Mr. Horsler appealed, arguing the notice was invalid, he complied, documents were outside his power/possession, and he had a reasonable excuse.
- •The Tribunal found that some requested documents were within Mr. Horsler's power to obtain, despite his claims otherwise.
Legal Principles
An information notice only requires production of documents within a person's possession or power (Schedule 36, paragraph 18).
Schedule 36, Finance Act 2008
The burden of proof lies with HMRC to demonstrate that documents were within the taxpayer's possession or power.
HMRC v Parissis [2011] UKFTT 218 (TC)
Documents are within a person's power if they can be obtained without great expense, even if the third party holding them has the legal right to refuse.
HMRC v Mattu [2021] UKUT 245 (TCC)
A 'reasonable excuse' for non-compliance requires objective assessment of the taxpayer's actions and circumstances.
Perrin v HMRC [2018] UKUT 156 (TCC)
Outcomes
Appeal dismissed; penalties upheld.
The Tribunal found that HMRC had established a prima facie case that the missing documents were within Mr. Horsler's power to obtain. Mr. Horsler failed to rebut this, and his asserted reasonable excuses were not accepted.