UT/2023/000126 - [2025] UKUT 00145 (TCC)

In this section we summarise the facts and background from the FTT Decision in order to put the Appellants’ grounds into context. We will set out further detail as appropriate when we come on to discuss the individual grounds. References in square brackets are to paragraphs in the FTT Decision.

On 25 September 2012, following a criminal investigation into allegations of drug trafficking and money laundering by Mr Butt and ten other members of his family, Mr Butt was arrested on suspicion of money laundering in connection with an OCG (Organised Crime Group) in Luton. In the absence of sufficient evidence for a criminal prosecution, no charges were brought against him. Two of his brothers and his two sons were charged and convicted of money laundering and/or drug trafficking offences ([23]). Mrs Begum was never arrested either in connection with these investigations or at all ([24]).

The NCA served notices on HMRC under s317(2) POCA to adopt its general Revenue functions on 13 August 2014 in relation to Mr Butt’s and Mrs Begum’s tax liabilities for the years 1998/99 to 2011/12. The NCA served further notices on 25 March 2015 and 25 June 2015 in respect of Mr Butt for 1997/98 and 2012/13 and 1996/7 ([45]-[48]).

On 2 December 2015 the NCA wrote to the Appellants to inform them of their decision to adopt HMRC’s revenue functions and to issue the assessments covering all the years under appeal ([51],[52]). The assessments were accompanied by covering letters. Penalty assessments were subsequently issued on the basis of deliberate behaviour. The assessments were issued pursuant to section 29 TMA and included the following narrative or equivalent depending on the tax years to which they related:

“Assessment for Income Tax

under section 18 (Schedule D) of the Income and Corporation Tax Act 1988 under Case I and/or in the alternative Case II and/or in the alternative Case VI, or in the alternative pursuant to Section 319 of the Proceeds of Crime Act 2002.”

The NCA subsequently, on 2 May 2017 issued individual “view of the matter” letters to Mr Butt and Mrs Begum ([57] – [62]). These included a year-by year summary of the basis upon which amounts had been assessed. In broad outline the amounts assessed were based on various items of expenditure in connection with property transactions, loans, personal expenditure including overseas travel and funds received into bank accounts in respect of which the source of funds had not been accounted for. The amounts identified were assessed to income tax and class 4 national insurance contributions. Class 4 national insurance contributions are payable by self-employed earners.