Ketan Patel v The Commissioners for HMRC
Decision date: 5 September 2025
Neutral citation: [2025] UKFTT 1098 (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 closure notices and discovery assessments for tax years 2009–2019 based on bank analyses and third‑party information showing significant deposits (notably from BTB). The Tribunal found Officer Jones’ discovery belief reasonable, held Mr Patel at least careless, accepted HMRC’s use of estimations and the presumption of continuity, and rejected Mr Patel’s attempts to characterise receipts as loans, reimbursements or employment income. The 2009 assessment was reduced to nil by agreement and the remaining revised assessments were upheld.
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: high
Where a taxpayer provides insufficient records, HMRC may treat unexplained bank deposits as taxable business income and may apply the presumption of continuity to assess other years unless the taxpayer rebuts that presumption; once HMRC makes a reasonable discovery and issues valid assessments, the burden shifts to the taxpayer to prove the assessed amounts are incorrect or deductible. The Tribunal also accepts that HMRC may use reasonable estimation methods rather than a full forensic line‑by‑line reconstruction.
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 a taxpayer’s inconsistent or unsupported evidence (such as conflicting dates of self‑employment or unsupported spreadsheets) undermines credibility, which affects the ability to rebut HMRC’s case, but this credibility finding is distinct from the statutory tests for discovery and time limits. The decision also noted that HMRC systems errors (e.g. in extracting a bank interest item) can occur without fatally undermining the overall enquiry.