UT/2023/000069 - [2024] UKUT 00278 (TCC)

The reason why Mr Zaman’s appeal succeeded in the FTT 2021 decision was because the FTT expressed its decision (at [96]) as one in which HMRC had not discharged their burden of proof. The UT, in the UT 2022 decision (at [35]), recognised that this was an error of law. While the burden of proof is on HMRC to establish the validity of a PLN, it is for (in this case) the trader to prove, by evidence, that an assessment to VAT issued by HMRC is incorrect. HMRC do not have that evidential burden: [34] of the UT 2022 decision.

The UT 2022 decision expressly observed (at [37]) that:

“The problem with the FTT’s conclusion [in the FTT 2021 decision] was not that its factual findings were wrong. Rather, it answered the question by reference to whether HMRC had discharged the burden of proof which, despite the FTT having expressed significant reservations about the reliability of Mr Zaman’s evidence, led it to find in his favour.”

Indeed, the UT 2022 decision (at [31]) described the FTT’s approach to the facts in the FTT 2021 decision as “a careful analysis” which had not been criticised by either party. Thus, the UT, in the UT 2022 decision, declined to remake the FTT 2021 decision and remitted the matter to the FTT, on the express basis that the remitter was not “an opportunity to ask the FTT to disturb…findings of primary fact or make new findings of primary fact.”: [39].