Kudehinbu v Cutts (HM Inspector of Taxes)
| Jurisdiction | England & Wales |
| Judgment Date | 15 April 1994 |
| Date | 15 April 1994 |
| Court | Chancery Division |
Chancery Division.
Vinelott J.
Timothy Brennan (instructed by the Solicitor of Inland Revenue) for the Crown.
This was an appeal by the taxpayer from the determination of the general commissioners for Bristol City substantially dismissing his appeal against estimated assessments to income tax on his profits as a taxi driver.
The commissioners had accepted the inspector's evidence that the amount of petrol consumed and the high mileage covered by the taxpayer's taxi showed that his profits must have been in excess of what he had declared, and that the level of his personal expenditure exceeded his profits.
The taxpayer wished to produce evidence before the court, which he had not adduced before the general commissioners, to show that those matters were explained by private use of the taxi by his relatives from Nigeria and that he received gifts for his living expenses from his family.
Held, dismissing the appeal:
The court had no jurisdiction to entertain fresh evidence which should have been adduced before the commissioners.
The taxpayer appeared in person.
At a meeting of the commissioners for the general purposes of income tax for the Division of Bristol City held on Thursday, 27 February 1992 the taxpayer appealed against assessments to income tax ranging in amount between £4,585 and £10,046 on his profits as a taxi driver and/or a taxi hire operator for the years 1985-1986 to 1989-90.
The question for the commissioners' determination was whether the assessments should be determined in the amounts set out in the a schedule produced to them.
The taxpayer appeared personally before the commissioners.
The commissioners found the following facts:
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(2) At all material times the taxpayer carried on business as a taxi driver and/or taxi hire operator.
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(3) His accounts and tax computations for the years 1985-86, 1986-87 and 1987-88 were submitted by his accountants to the inspector on 3 July 1990.
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(4) The inspector formed the view that the accounts and computations for 1986-87 and 1987-88 were questionable in that the takings were low by reference to petrol used; profitability was low (and, in fact, there was a loss shown for 1986-87); and the amounts shown as being available for the taxpayer's living expenses were low.
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(5) The inspector commenced an investigation of the taxpayer's tax affairs and examined the taxpayer's business books and records. He formed the view that these were unreliable.
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(6) After prolonged discussions and negotiations with the taxpayer...
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