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Application to the facts of this case
Application to the facts of this case
The issues raised by HMRC in this case relate to Grounds 3, 4 and 5.
There was no failure by the FTT to give adequate reasons in relation to the issues surrounding Ground 3. It is clear that HMRC failed in their case on the place of supply issue in relation to Global because the FTT decided, in our view correctly, that HMRC had the burden of proof and that HMRC had failed to prove their case.
As regards Ground 4, the reasons for the FTT’s conclusion as to the exercise of best judgment are clear. It identified a defect in the assessment, and it found that that defect – a failure to take into account the evidence from the York Wines bank statements – was sufficiently serious as to amount to a failure to exercise best judgment. HMRC may dispute that reasoning and that conclusion, but it does not amount to a failure to give adequate reasons.
As regards Ground 5, we have found that the FTT erred in law in that they failed to address correctly the exercise of considering a best judgment challenge to the assessment. The failure was not a failure to give adequate reasons. The FTT’s reasoning was clear. As we have explained, the issue was that the FTT failed to ask itself the right question. The result was that it did not produce an answer to that question, as opposed to producing an answer which was not properly reasoned.
- Heading
- Introduction
- Background
- VAT
- Excise duties
- The FTT Decision
- The Grounds of Appeal
- Ground 1: the burden of proof
- Background
- The FTT Decision
- The parties’ submissions in outline
- The relevant case law principles
- The burden of proof in tax appeals
- The burden of proof in penalty appeals
- DLN
- Penalties under Schedule 24 FA 2007 and Schedule 41 FA 2008
- Ground 2: approach to the issues and evidence
- Background
- The FTT Decision
- Discussion
- Conclusion
- Ground 3: conclusions inconsistent with the underlying evidence
- Background
- The FTT decision
- The parties’ submissions in outline
- Discussion
- Application to the facts of this case
- Conclusion
- Ground 4: breach of “best judgment” requirement
- Background
- Relevant case law principles
- There are two distinct questions which arise where an assessment purports to be made under section 73(1) VATA: first, whether the assessment has been made under the power conferred by that section; an
- The test as to whether an assessment is made to the best of HMRC’s judgment is classically set out in the judgment of Woolf J in Van Boeckel , at page 292e-293a, where he said this
- As to whether an alleged error in an assessment is to be taken as evidence that the assessment was not made to the best of HMRC’s judgment, the relevant question is whether the mistake is consistent w
- There are, however, dangers in an over-rigid adherence to a two-stage approach (i.e. first, validity; second, quantum) to a challenge to a best judgment assessment. The important issue for the tribuna
- The FTT Decision
- The parties’ submissions in outline
- The only relevant test of whether the assessment met the best judgment requirement was whether the mistakes in the assessment were “consistent with an honest and genuine attempt to make a reasonable a
- Application to the facts of this case
- Ground 4
- Ground 5
- Conclusion
- Background
- In relation to Ground 3
- In relation to Ground 4
- In relation to Ground 5 Why, if there was a breach of the best judgement requirement, it rejected the Court of Appeal’s guidance in Pegasus Birds at [23-29] not to automatically set aside the whole assessment but instead to
- If the Tribunal considered Mr Foster’s failure to consider the York Wine bank statements was so “serious or fundamental” that it required the whole assessment to be set aside ( Pegasus Birds [29]), wh
- The parties’ submissions in outline
- Discussion
- Application to the facts of this case
- Conclusions