Taxpayer should be allowed to argue his case

The taxpayer appealed against a misdeclaration penalty HMRC imposed under VATA 1994 s 63 for inaccurate input tax claims. It refused to repay the tax on the basis the taxpayer knew or should have known the transactions were connected with the fraudulent evasion of VAT. The taxpayer appealed but HMRC applied to have the appeal struck out.

The First-tier Tribunal found against the taxpayer and struck out the appeal. The Upper Tribunal allowed his appeal in part. It found that the First-tier Tribunal was wrong to strike out the penalty appeal because the taxpayer had run out the funds required to obtain proper legal representation.

The taxpayer appealed saying the penalties should be set aside on the basis that HMRC had breached Article 6 of the European Convention on Human Rights (ECHR). HMRC said it was an abuse of process for the taxpayer to advance issues which arose...