Burden of proof rests mainly with HMRC

HMRC alleged that the taxpayer had evaded VAT and excise duties through the fraudulent diversion of alcohol into the UK and raised assessments and penalties. The First-tier Tribunal upheld the taxpayer’s appeal. In essence the tribunal considered that HMRC had failed to discharge the burden of proof.

HMRC appealed. It said the First-tier Tribunal had erred in law in concluding that the burden of proof lay with HMRC.

On the first ground of appeal that the First-tier Tribunal erred in law in finding that HMRC bore the burden of proof in relation to the penalties the Upper Tribunal decided that while the taxpayer bore the burden of proof in relation to the amount of tax assessed ‘the First-tier Tribunal was right to conclude that the burden of proof fell on HMRC in relation to all relevant aspects of the penalty appeals with the possible exception of...