TC09533 - [2025] UKFTT 00593 (TC)

The evidence before us consisted of the 2024 accounts and Mr Kearney’s oral evidence.

Mr Kearney gave evidence in the hearing as to the appellant’s business and financial position. We found Mr Kearney to be an honest witness who gave credible evidence as to the nature of the business. He was also able to give evidence about its finances in general terms but did not have any understanding as to the appellant’s accounts beyond the superficial.

Mr Kearney’s evidence about the business can be summarised as follows:

Mr NcNamee made submissions in closing that under the licensing regime for haulage companies in Northern Ireland a business must keep in free capital £8,000 for the first lorry and £5,000 for each additional lorry. Mr NcNamee suggested 15 was the relevant figure but we suspect Mr McNamee was taking the trailer rather than the tractor number of 9. In any event, and following discussion at the hearing, we take it that Mr McNamee’s submission could be reduced to saying that at most this would require either £48,000 (9 tractors) or £83,000 (16 trailers) to be retained. Mr Kearney did not in clear terms adopt this evidence and we have had nothing else to support the submission by Mr McNamee so we give this evidence little weight.

Mr Kearney could not recall why the appellant did not respond to HMRC’s request for information in October 2024 but did say said he did not want to spend money on accountant’s fees for something (such as up to date interim accounts) he did not need but HMRC did. Mr Kearney was advised by the appellant’s accountants not to provide HMRC with bank statements because they contained a lot of sensitive information on employees, suppliers and others which gave rise to data protection concerns. Mr Kearney did not know what the 2025 accounts would show but he knew they would be worse than 2024.

The 2024 accounts, their meaning and significance were discussed extensively in the hearing. The principal relevant aspects of the accounts can be summarised as follows:

Mr Kearney told the Tribunal that the fixed assets principally consisted of the tractors and trailers.

Mr Kearney was vague about the dividends paid to shareholders in 2024. Following some analysis by Mr Bell of the 2023 and 2024 position, Mr Kearney agreed with Mr Bell that in all likelihood dividends in the region of £80,000 had been paid to shareholders and that £24,000 had been paid in total as salaries to the two directors, Mr Kearney and his son.

Mr Kearney was asked about the £677,901 shown as “cash or cash equivalents”. His explanation was that it represented the value of stock produced by suppliers to sell to garden centres which the suppliers could not store. The appellant would keep it in their yard pending delivery to garden centres, in April or May. Neither myself nor, more importantly, Mr Bell, an accountant, were satisfied with Mr Kearney’s attempt to explain how storing goods, whether as owner or not, could be described as “cash or cash equivalents”.