Michael John Thomas v Commissioners for Her Majesty's Revenue and Customs
Decision date: 12 November 2010
Neutral citation: [2010] UKFTT 567 (TC)
Overall AI summary confidence: medium
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: medium
This appeal concerned CIS-based tax assessments for 2003/04 and 2004/05 raised against Mr Michael John Thomas, who claimed that his manager, Mr Russell, had misappropriated all business income. The First-tier Tribunal found Mr Thomas bore the onus of showing on the balance of probabilities that he derived no income in those years and that the late, uncorroborated letter from Mr Russell did not suffice. The tribunal accepted the HMRC reviewer’s apportionment of income on the available evidence and dismissed the appeal, upholding the revised assessments.
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 asserts that a third party wholly misappropriated business receipts such that the taxpayer derived no taxable income, the taxpayer must produce corroborative evidence beyond uncorroborated admissions by an unreliable third party; in the absence of such corroboration, a reviewer’s reasoned apportionment based on available bank records, cheque schedules and material cost proportions can be a permissible basis for adjusting and upholding CIS assessments.
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 recorded criticisms of delay and handling by HMRC and accepted the genuine severity of Mr Thomas’s ill health, but indicated these factors did not provide the necessary corroboration to displace the assessments; these comments were factual observations rather than determinative legal principles.