Tribunal appeal success – decision in favour of client

Penalty appeal to Tribunal

Our client had received a series of penalties totalling almost £250,000.  Following our VAT advice the client instructed one of our VAT experts to lodge a Tax Tribunal appeal.

In this particular first-tier Tribunal appeal the burden of proof rested upon the Appellant since this was an appeal against a penalty which is classified as criminal in nature by Strasbourg jurisprudence as confirmed by the Court of Appeal.

Points at issue

The first issue in this penalty appeal argued during the Tribunal appeal hearing was whether in the absence of agreement, HMRC could prove that they served one or any of the required notices. The Appellant denied receipt of any of them.

No copy notices have been served or filed by HMRC nor witness statement evidencing service had been filed.

At the material time, HMRC like everybody else was affected by the pandemic. This would affect post rooms. On behalf of the Appellant it was submitted that it is simply not good enough for HMRC to say that documents were served when he has no evidence or knowledge of this.

An Appellant is entitled to rely upon the presumption of innocence enshrined in article 6 (2) of the European Convention on Human Rights. Further, Article 6(3) (d) confers a right to examine or have examined witnesses against an Appellant. The Respondent had chosen to call no witnesses.

It was submitted that it follows that the Appellant had no case to answer in line with R v Galbraith 1981. The same principle is found in the Criminal Procedure Rules 25.9(3).

Tribunal appeal decision

The Tribunal concluded that HMRC’s evidence was “weak” with regard to “the printing and postage” of relevant notices. The Tribunal went on to say  “that this evidence is insufficient to demonstrate, on the balance of probabilities, that the notices were properly served” and therefore our client could not be liable for the penalty. Penalty appeal allowed.

The decision provided by the Tribunal were summary of the findings of fact and reasons for the decision consequently the decision remains unreported.

The Tribunal appeal decision highlights the importance of instructing VAT specialists such as those at Solve VAT.  Call us on 0161 883 2120 to discuss your VAT penalty appeal.