![UT/2022/000157 - [2024] UKUT 00346 (TCC)](https://backend.juristeca.com/files/emisores/logo_ICfrj4g.png){kind=logo}
Background
Background
As we have mentioned above, the question of where the burden of proof lies assumes some significance in this case. This is because of the manner in which the FTT reached its conclusion that Global was not liable to be registered for VAT in the UK.
The relevant passage in the FTT Decision is at FTT [642]-[644] where the FTT says this:
… even if Global was knowingly involved in illegality by selling alcohol in the European Union to United Kingdom traders, or to an OCG that Global knew intended to smuggle those goods, that is not enough. It is a too broad brush approach. Although HMRC contend that Mr Malde controlled SA and Global and through them Golden Apple, Galac and Adrena and made non-commercial arrangements, in that he is effectively selling to himself, as Mr Webster contends, the choice of SA and Global as the taxable entities is dependent upon a decision to ignore the involvement of the other corporate entities and the reality is that either Golden Apple, Galac and Adrena existed and played their role or, contrary to the evidence, they had no legal existence and can therefore be disregarded.
While there is no evidence before us as to the company law of any of the jurisdictions in which these various companies were established or operated, there is no suggestion that the theory of the effect of incorporation is different and no evidence to support that either. Therefore, it is necessary to treat the various corporate entities as having their own legal identity which cannot be disregarded. Accordingly, and applying the same process as we did with SA, it would appear that Adrena, not Global, owned the alcohol seized in the United Kingdom and that it supplied the alcohol that was sold.
As such, and in the absence of evidence that Global was the owner of the goods that were supplied in the United Kingdom we are unable to find that it was liable to be registered for VAT.
HMRC dispute much of the reasoning in this passage. We will address their other points later in this decision. However, as can be seen from this passage, the FTT relied upon HMRC’s failure to prove that Global owned any of the goods that were sold in the UK in determining that Global had not made taxable supplies in the UK and so was not liable to register for VAT in the UK. That conclusion was sufficient to determine all the appeals in favour of Global and Mr Malde, with the exception of Mr Malde’s appeal against the DLN.
- 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