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The burden of proof
The burden of proof
In their Statement of Case, HMRC argue that in an appeal against an assessment, the onus of proof is upon the Appellant. Although HMRC do not cite any authority in support of their assertion, I accept that this general proposition has been confirmed by the Upper Tribunal in HMRC v Sintra Global [2024] UKUT 00346 (TCC) at paragraph 68 where it was said:
… on an appeal against an assessment to tax, the general rule is that, unless the statute expressly or impliedly provides otherwise, the burden is on the taxpayer to show that the assessment is wrong and to establish the correct amount of tax that is due.
However, in Burgess and Brimheath Developments Limited v HMRC [2015] UKUT 578 (TCC), it was common ground that while the appellants bore the onus of proof in respect of the substantive issues, HMRC bore the onus of proof in relation to the competence and time limit issues. This was agreed by the Upper Tribunal who held:
In this case, therefore, HMRC had the duty of establishing their case on both the competence and time limit issues. The burden of proof lay on them in each of those respects. There was no obligation on the part of Mr Burgess or Brimheath to raise those issues. As Henderson J said in Household Estate Agents, in the absence of relevant evidence there is nothing to displace the general rule that discovery assessments (and we would add assessments outside the normal four-year time limit) may not be made. The provisions of s 50(6) TMA that have the effect that an assessment stands good unless the tribunal decides that an appellant has been overcharged by it, which leads to the burden being on an appellant to displace an assessment that has been validly made, do not affect this general rule as to the validity of the assessment.
While Burgess related to direct tax assessments, in Monmore Properties Limited v HMRC [2024] UKFTT 00137 (TC), which related to VAT assessments, both parties agreed that the general rule as to the validity of the assessment also applies to indirect assessments. In Monmore, the FTT noted:
Burgess means, as both parties recognise, that the Tribunal must consider the validity of any assessment which has been appealed to it.
…
Both parties accept that as far as the timing and competency of assessments are concerned, firstly, HMRC bear the burden of proof and secondly that this Tribunal is bound by the Upper Tribunal in Burgess.
Therefore, I do not agree with HMRC that it is for the Appellant to show that the assessment was made out of time. If I am to confirm the assessment under appeal here then I must be satisfied that the assessment was validly made within time; the onus is on HMRC to demonstrate that.
The standard of proof is the balance of probabilities.