UT/2022/000157 - [2024] UKUT 00346 (TCC)

Additionally, Mr McGuinness contends that if Mr Malde, who has put himself forward relying on the power of attorney (see above) as the person entitled to represent and pursue these appeals in relation to Global (which is the undisputed successor and carrying on the same business as SA), was in control of SA and Global he would be in a position to produce trading records for both companies but has chosen not to do so.

This, Mr McGuinness says, is a very relevant consideration to the determination of the Place of Supply issue and the quantum of the best of judgment assessment that was made by Mr Foster on the material he had, particularly in relation to the arguments advanced on behalf of the appellants regarding lack, or paucity, of evidence. He says that should we determine that Mr Malde did control SA and Global it should “significantly influence” our decision as he has chosen not to place before the Tribunal evidence to which, by virtue of his position of control, he had access.

To do otherwise would, he submits, be tantamount to a fraudster’s charter because, if we decide against Mr Malde on the issue of control, the logical consequence would be that he has deliberately chosen not to put the SA and Global material before the Tribunal which, Mr McGuinness argues, is more likely to support HMRC’s case and rather than Mr Malde’s or Global’s.

Mr Webster, however, contends that there are two significant issues with such an approach. The first is that it effectively reverses the burden of proof; and the second is the circularity of the argument raised by HMRC in that if we were to find he controlled SA and Global it would be Mr Malde’s choice not to produce the records of the respective companies with the inference to be drawn that his failure to do so would show that the companies did make supplies in the United Kingdom. Mr Webster says that this undermines Mr Malde’s primary defence – that he did not control the companies and cannot produce any trading records – and that it would be neither fair nor appropriate to proceed on such a basis.

Additionally, Mr Webster submits, that where a company is controlled and where it trades from are separate issues and there is no logical connection. As such even if we were to find that Mr Malde did control SA and Global it would not assist us in determining whether their supplies were made in the United Kingdom.

Having given the matter some thought, we accept Mr Webster’s submission regarding the reversal of the burden of proof. Having come to such a conclusion and given Mr Webster’s secondary point, concerning the circularity of HMRC’s argument, was a matter raised by the Tribunal (Ms Hunter) during the oral closing submissions, we have decided to consider the Place of Supply Issue before that of control of SA and Global. An advantage of such an approach is that a finding that neither SA nor Global made any supplies in the United Kingdom would be determinative whereas as finding that Mr Malde did not control either company would limit, but not completely eliminate, consideration of the Place of Supply and Quantum issues.”