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Lack of evidence to support reasonable excuse claim

02 December 2022
Issue: 4868 / Categories: Tax cases
M Mirza v CRC, Upper Tribunal (Tax and Chancery Chamber), 9 November 2022

In February 2019 the taxpayer who was registered for VAT submitted a VAT return showing VAT due of about £24 677. As he failed to pay it by the due date HMRC applied a default surcharge.

The First-tier Tribunal had found that the taxpayer had been in the default surcharge regime in 2010 and he had not paid VAT since 2012. In 2015 HMRC and the police raided the taxpayer’s business premises and seized documents and cash of about £550 200.

The taxpayer had made several repayment claims for input VAT dating back to 2012 and believed that these resulted in HMRC owing him about £190 000.

In 2018 HMRC wrote to the taxpayer saying that his outstanding tax debts were exceeded the seized cash and that he should contact the debt management department.

The taxpayer appealed against the default surcharge on the basis that the...

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