Shaun Harte v The Commissioners for HMRC
Decision date: 30 May 2024
Neutral citation: [2024] UKFTT 493 (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 discovery assessments, a closure notice, inaccuracy penalties and a late VAT‑registration penalty arising from undeclared bank receipts, corporate‑card charges, and incorrect capital‑allowance/home‑office claims. The Tribunal found two bank receipts (£36,000 and £27,500) and £12,930.89 of personal expenditure met by the company were taxable income, treated a £6,000 receipt as a loan repayment, allowed limited motoring and home‑office deductions, disallowed capital allowances, and adjusted penalties and assessment periods according to findings of deliberate versus careless conduct. The discovery assessments were reduced by removing the credit‑card insufficiency where HMRC had not established culpable conduct, and VAT registration liability (from 1 March 2009) and its penalty were upheld and reduced.
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 HMRC establishes a prima facie case that part of an undercharge is due to insufficiency and culpable conduct, the burden shifts under s.50(6) to the taxpayer to show the assessment is excessive as regards other items; accordingly the Tribunal may excise from a discovery assessment those parts (e.g. credit‑card insufficiency) for which HMRC has not proved culpable conduct and apply shorter (6‑year) or longer (20‑year) assessment periods depending on whether conduct is careless or deliberate.
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 suggested it may be unconscionable for HMRC to issue discovery assessments for later years when it had earlier opportunities to open timely enquiries; and endorsed HMRC’s practice of relying on direct bank evidence rather than extrapolation where complete records exist for the years in question.