Dr Syed Akhlaq Rizvi v The Commissioners for HMRC
Decision date: 13 January 2023
Neutral citation: [2023] UKFTT 124 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
Dr Rizvi claimed EIS tax relief for 2015–2017 without holding required EIS3 certificates and accepts he was not entitled to those claims. The tribunal found Dr Rizvi himself was not careless because he reasonably relied on his long‑standing accountants, but that McKenzie Knight (who prepared and promoted the investments and prepared the returns) acted on his behalf and were careless in failing to verify EIS3s. HMRC’s discovery assessments within six years were therefore lawful; the appeal was dismissed and the three assessments confirmed.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
Where a taxpayer reasonably relies on a competent long‑standing adviser to carry out straightforward, mechanical checks in preparing returns, the taxpayer may not be negligent; however, a person who prepares and files returns can be “acting on the taxpayer’s behalf,” and their carelessness in failing to perform such checks (here, verifying EIS3 certificates) can justify HMRC issuing discovery assessments within the extended six‑year period.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The judgment describes checking for an EIS3 as a relatively mechanical, undemanding task that should be obvious to firms promoting or preparing EIS claims, and distinguishes this sort of administrative carelessness by an agent from wider inquiries into scheme substance (which were not alleged against the taxpayer here).