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Conclusion
Conclusion
We have allowed the appeal on both Ground 4 and Ground 5. In doing so, we have identified errors of law in the FTT Decision. We are therefore required by section 12(1) TCEA 2007 to consider whether to set aside the FTT Decision.
As regards Ground 4, we do not regard the error as immaterial. The FTT’s failure to apply the correct test limited the focus of the FTT’s enquiry into HMRC’s assessment. It informed the FTT’s decision that the entire SA assessment should be set aside, which was the basis of Ground 5.
As regards Ground 5, once again, this is not a case where the error of law identified above can be said to have been immaterial. To the contrary, there is good reason to think that, if the FTT had asked themselves the right question, they may well have come to the conclusion that justice could be done by correcting the amount of the assessment to what the FTT found to be a fair figure (see the comment at FTT [667]).
As we have mentioned above, Grounds 4 and 5 relate to the appeal against the DLN. Accordingly, we will set aside the FTT Decision in so far as it relates to the DLN.
Ground 6: inadequate reasons
Ground 6 is that the FTT failed to give any or adequate reasons with respect to several key matters set out in the application.
- 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