WJE Limited & Anor. v The Commissioners for HMRC
Decision date: 23 January 2023
Neutral citation: [2023] UKFTT 74 (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
This appeal concerned HMRC assessments to VAT and corporation tax following a compliance check of WJE Ltd and admissions by its director KLC that purchases and sales had been undeclared and records manipulated. The First-tier Tribunal accepted HMRC's use of third‑party supplier data (Total Asia), reasonable sampling and extrapolation as satisfying the statutory "best judgment" standard, upheld the application of the presumption of continuity to extend uplifted profits, and confirmed penalties and officer‑liability notices against KLC. The appeal was dismissed and revised assessment amounts were 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
A VAT assessment based on partial third‑party supplier data together with admissions can meet the "best of their judgment" requirement where the compliance officer fairly considers the available material and applies reasonable sampling and extrapolation; and where an investigation shows systematic suppression over an examined period, a rebuttable presumption of continuity may permissibly be applied to earlier or adjacent periods absent evidence of changed circumstances.
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 Tribunal commented that tribunals expect HMRC to give proper advance notice before making allegations of dishonesty against their officers, and that HMRC are not required to conduct exhaustive investigations — reasonable sampling from available third‑party data can suffice for best‑judgment assessments.