Lower tribunal should give fuller explanation for decision

The taxpayer was a drinks wholesaler incorporated in 2002. HMRC raised assessments based on gross sums of cash deposited at the taxpayer’s bank. It was not possible to reconcile the deposits with transactions which the taxpayer said it entered into with various French outlets.

The First-tier Tribunal dismissed the taxpayer’s appeal on the ground there was no evidence to match the taxpayer’s assertions. The taxpayer said the tribunal erred in law by failing to conclude that it could not have made the supplies in the UK and that the tribunal had not explained its decision properly.

The Upper Tribunal said the effect of the taxpayer’s first argument was to ‘impermissibly’ reverse the burden of proof. Referring to Brady v Lotus Car Companies plc and another [1987] STC 635 the judges said it was for the taxpayer to show the assessments were incorrect even if the matter involved fraud. The...