The Commissioners for HMRC v Mohammed Zaman
[2024] UKUT 278 (TCC)
Mohammed Zaman v The Commissioners for HMRC
28 April 2023
[2023] UKFTT 404 (TC)
First-tier Tribunal
Mr. Zaman was accused of inaccurate VAT returns. A court initially got it wrong about who had to prove their case. After a second look, the court decided Mr. Zaman proved he was right – his business's sales weren't actually made in the UK, so the tax claim was incorrect.
Key Facts
- •Appeal against a Personal Liability Notice (PLN) for VAT inaccuracy.
- •Case remitted by the Upper Tribunal (UT) to the First-tier Tribunal (FTT) due to an error in the original FTT decision regarding the burden of proof.
- •The central issue was whether the place of supply of Zamco's goods was outside the UK.
- •The appellant, Mohammed Zaman, represented himself.
- •The respondent was HMRC.
- •The FTT’s original decision wrongly placed the burden of proof on HMRC.
- •The UT decision correctly placed the burden of proof on the appellant to demonstrate the assessment was incorrect.
Legal Principles
The burden of proof rests on the taxpayer to demonstrate that a VAT assessment is incorrect.
Awards Drinks v HMRC [2020] UKUT 0201 (TCC) and [2021] EWCA Civ 1235
A judge should only resort to the burden of proof when unable to resolve a factual issue after attempting to do so through evidence evaluation.
Morris v London Iron and Steel Co. Ltd [1987] 1 QB 493 (CA); Stephens v Cannon [2005] EWCA Civ 222; Verlander v Devon Waste Management [2007] EWCA Civ 835
Outcomes
Appeal allowed.
The FTT, applying the correct burden of proof, found that the appellant discharged the burden of proving the VAT assessment was incorrect because the goods were not located in or moved to the UK as part of Zamco’s sales. The evidence, including documentation and other corroborating facts, supported this finding.