TC09555 - [2025] UKFTT 00748 (TC)

They discovered an insufficiency in the corporation tax returned by 3KH;

The insufficiency was due to deliberate conduct by 3KH;

Such deliberate conduct was attributed to the conduct of MJ and MB.

The VAT assessments were not made in exercise of HMRC’s best judgment or that their quantum is overstated;

The Discovery assessments, if validly made, overstate the quantum of corporation tax due.

We were provided with four bundles of documents together containing 26,999 pages. The appeals were listed for four days requiring the parties to indicate whether additional reading time was required but the parties did not indicate any such requirement. We therefore advised the parties (consistent with the guidance given by the Upper Tribunal in Adelekun v HMRC [2020] UKUT 244 (TCC)) that we would take our decision only by reference to documents to which we were taken, the relevance of which was explained to us during the hearing, and in respect of which the other party was given an opportunity to address the relevance. Comparatively few pages were referenced and only the witness statement of Officer Pinder was cross referenced to the bundle. We attach as an annex to this judgment a list of the pages to which we were referred (the page numbers identified are the pdf page numbers rather than the bundle page numbers – contrary to the Practice Direction on Electronic Bundles the page numbering between hard copy and pdf were not aligned). Despite, on occasions, being referred only to specific pages of certain documents, where relevant, we read the whole document of which the referenced page formed part. As a consequence of the approach we adopted and of which the parties were made aware, our judgment does not take account of all of the evidence made available to us generally.

Further, in this decision we address only matters articulated as in dispute between the parties either in their skeleton arguments or in submissions. Thus, we do not address matters which apparently, and through the course of correspondence, had been in dispute but which did not feature in the evidence or argument directly presented to us (even where referenced in witness statements).

We heard oral evidence from Officers Beard and Pinder. We found them both to be honest and credible witnesses who had been faced with an uncooperative taxpayer. They did their best to gather information, assimilate it and make assessments based on the evidence they had. As we accept their evidence where it is relevant we simply find facts rather than setting out the evidence provided.

We also heard evidence from MJ and MB. In contrast to Officers Beard and Pinder we found the evidence of MJ and MB to lack credibility and, in the main, we could not accept the truth of their evidence taken. They appeared us to be readily willing to mislead the Tribunal and give evidence that they considered, in the moment, to suit their case. We note that their witness statements were all but identical to one another. At HMRC’s request and with the consent of Appellants’ counsel, MJ and MB were not present for each other’s testimony. Their oral evidence was inconsistent with their statements and, in our view, inconsistent with one another in detail; principally we suspect because of the attempt to make up evidence as the hearing progressed.