Hundal
| Jurisdiction | UK Non-devolved |
| Judgment Date | 20 July 2018 |
| Neutral Citation | [2018] UKFTT 469 (TC) |
| Date | 20 July 2018 |
| Court | First Tier Tribunal (Tax Chamber) |
[2018] UKFTT 0469 (TC)
Judge Tony Beare
Hundal
Mr S Reevell appeared for the appellant
Ms H Jones, Officer of HM Revenue Customs, and Mr M Beattie, Solicitor to HM Revenue and Customs, appeared for the respondents
Information notices – Notices to provide information and documents – Whether items requested were reasonably required for the purposes of checking the appellant's tax position – Yes – Consideration of the jurisdiction of the First-tier Tribunal in relation to information notices – Appeal dismissed – Appeals against penalties dismissed – Applications for closure notices dismissed.
DECISION
Introduction
[1] This decision relates to a number of applications and appeals by Mr. Amarjit Singh Hundal (the “Appellant”). They are as follows:–
- an appeal against certain requests which were made in an information notice issued under paragraph 1 Schedule 36 Finance Act 2008 (the FA 2008) on 17 October 2014 in respect of the tax years of assessment ending 5 April 2012 and 5 April 2013 (the First Information Notice);
- an appeal against a penalty notice of 12 July 2016 in the amount of £300 (the First Penalty Notice) in relation to the First Information Notice;
- an application for a closure notice in respect of the tax years of assessment referred to in sub-paragraph 1(a) above;
- an appeal against a penalty notice of 21 December 2016 in the amount of £300 (the Second Penalty Notice) in relation to an information notice issued under paragraph 1 Schedule 36 FA 2008 on 17 June 2015 in respect of the tax years of assessment ending 5 April 2012 and 5 April 2013 (the Second Information Notice);
- an appeal against certain requests which were made in an information notice issued under paragraph 1 Schedule 36 FA 2008 on 2 October 2015 (and subsequently re-issued on 8 January 2016) in respect of the tax year of assessment ending 5 April 2014 (the Third Information Notice); and
- an application for a closure notice in respect of the tax year of assessment referred to in sub-paragraph 1(e) above.
Background
[2] The relevant events that form the background to these proceedings may be summarised as follows:
- the Appellant is a director and a direct or indirect shareholder in various companies that either form part of the group of companies that is headed by a company called Gold Nuts Limited or are connected with one or more members of that group of companies. The group of companies is controlled by a Mr Shamir Budhdeo (SB) and members of SB's family. The Appellant is also a member in a limited partnership called Symbio Energy Solutions LLP (Symbio) the members of which include SB. For convenience, I will refer in the rest of this decision to the members of the group of companies which is headed by Gold Nuts Limited, the companies connected with any of those companies and any other entities associated with SB, such as Symbio, as the GN Group;
- SB has formally waived his right to require the Respondents to maintain the confidentiality of his tax affairs to the extent that those tax affairs are relevant to these proceedings;
- prior to October 2012, the Respondents, through a team in their office in Portsmouth, were conducting a number of enquiries in relation to certain of the entities falling within the GN Group and various individuals associated with the GN Group, including SB and the Appellant. The lead investigator of that team was Mr Antony Douglass, a corporation tax specialist, but the team also included VAT and PAYE/NI specialists;
- in October 2012, Mr Douglass referred those enquiries, via the Respondents' standard evasion referral procedure, to the Respondents' Specialist Investigations Department (SID) based in the Respondents' office in Newcastle;
- the referral was allocated to Mrs Karen Murphy, a senior member of SID. Mrs Murphy conducted an extensive review of the position in relation to the relevant entities and individuals and concluded, in consultation with her manager, Mrs Helen Haghighat, that the enquiries into certain of the entities falling within the GN Group should continue, that the Respondents should open an investigation into SB under Code of Practice 9 (COP9) and that, in relation to the Appellant, although an investigation under COP9 was not appropriate, there were certain risks to the UK exchequer arising out of his tax affairs which warranted further investigation, primarily those arising out of a shortfall between the income and capital gains declared by the Appellant in his tax returns and his apparent means;
- as part of that decision, Mrs Murphy and Mrs Haghighat determined that primary responsibility for the enquiries into the relevant entities falling within the GN Group should be transferred back to the Respondents' office in Portsmouth, that Mrs Murphy herself would take primary responsibility for the COP9 investigation and any other enquiries into SB and that, in relation to the Appellant, Mrs Murphy would enlist the services of a trainee to carry out the risk assessment, which trainee would be mentored by Mrs Murphy;
- the trainee nominated for this purpose by the training team manager, Mrs Isobel Young, was Mr Darren Kilmartin. As a result of his initial investigation into the affairs of the Appellant, Mr Kilmartin, in consultation with his mentor, Mrs Murphy, determined that it was appropriate to open formal enquiries into the tax affairs of the Appellant in respect of the tax years of assessment ending 5 April 2012 and 5 April 2103 and it was in connection with those enquiries that Mr Kilmartin issued the First Information Notice on 17 October 2014;
- Mr Kilmartin's involvement with the enquiries into the Appellant's tax affairs ceased on 16 December 2014 as a result of his having to take an extended leave of absence for health reasons and he was replaced from January 2015 by another trainee, Miss Liza Oliver. Like Mr Kilmartin, Miss Oliver was mentored by Mrs Murphy and so her decisions in relation to the conduct of the ongoing enquiries into the Appellant's tax affairs were taken by her in consultation with Mrs Murphy. It was in connection with those ongoing enquiries that the Second Information Notice of 17 June 2015 (which is not itself a subject of these proceedings) was issued. Miss Oliver also determined that an enquiry into the Appellant's tax affairs in the tax year of assessment ending 5 April 2014 should be opened and, in the course of conducting that enquiry, issued the Third Information Notice on 2 October 2015 (and re-issued that notice on 8 January 2016); and
- in March 2016, the primary responsibility for the enquiries into the tax affairs of the Appellant was moved from the Respondents' office in Newcastle to the team within the Respondents' office in Portsmouth which was dealing with the enquiries into certain of the entities falling within the GN Group. By that time, Mr Douglass had changed roles within the Respondents and leadership of that team had passed to Mr James Moss, an existing member of that team. Mrs Helen Hollis, an income tax specialist in the Respondents' office in Portsmouth, was the member of the team to whom the enquiries in relation to the Appellant were allocated and it was Mrs Hollis who went on to issue the First Penalty Notice and the Second Penalty Notice.
[3] From the procedural perspective, the detailed chronology of events in relation to each of the appeals referred to in paragraph 1 above is as follows:
- the Appellant submitted his notice of appeal against the First Information Notice on 17 November 2014. That appeal was dismissed by the Respondents on 16 December 2014 and then, following a review, on 18 June 2015. The Appellant notified the First-tier Tribunal of his appeal against the First Information Notice on 18 July 2015 but did not do so in proper form and the appeal was not properly notified to the First-tier Tribunal until 10 January 2017. Both the appeal against the First Information Notice and the notice of appeal against that notice to the First-tier Tribunal are therefore late;
- the Appellant submitted his notice of appeal against the First Penalty Notice on 10 August 2016. The appeal is therefore in time. The appeal was dismissed by the Respondents on 6 September 2016 and then, following a review, on 25 November 2016. The Appellant notified the First-tier Tribunal of his appeal on 21 December 2016. The notice of appeal against the First Penalty Notice to the First-tier Tribunal is therefore in time;
- the Second Penalty Notice relates to a failure on the part of the Appellant to comply with the Second Information Notice. The Second Information Notice was issued under paragraph 1 Schedule 36 FA 2008 on 17 June 2015. In relation to the Second Information Notice, the Appellant submitted his notice of appeal on 24 June 2015. The appeal was therefore in time. The appeal was dismissed by the Respondents on 2 October 2015 (and again on 8 January 2016 because the original letter was returned to the Respondents by Royal Mail). The letter from the Respondents offered the Appellant a right to request a review of their decision on or before 6 February 2016. That letter also notified the Appellant that the Respondents were dismissing the Appellant's appeal against the First Information Notice and enclosed the Third Information Notice. The Appellant failed to request a review of the Respondents' decision to reject his appeal against the Second Information Notice by 6 February 2016, despite writing to the Respondents on 5 February 2016 to say that he would reply to the Respondents' letters by that date. However, he did write to the Respondents on 18 February 2016 to request an appeal of the decision. (I will say more below about my interpretation of the language used by the Appellant in that letter);
- the Respondents wrote to the Appellant on 12 July 2016 to the effect that they were interpreting his letter of 18 February 2016 as an appeal against the Third Information Notice and that therefore the Appellant's appeal against the Second Information...
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2 cases
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Budhdeo and Others
...These appeals were reported as Gold Nuts Ltd [2016] TC 04875, Gold Nuts Ltd [2017] TC 05602, Gold Nuts Ltd [2017] TC 05828, Hundal [2018] TC 06647 and Mathew [2015] TC 04342. [8] In July 2018, following a case management hearing, the Tribunal gave directions for the future conduct of this a......
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Jupiter Online Ltd
...appeal was accordingly dismissed. Comment The decision quotes both Judge Redston in Mathew [2015] TC 04342 and Judge Beare in Hundal [2018] TC 06647 to support HMRC's submission that the burden of proof in relation to the information/documentation being “reasonably required” for the purpose......