Hague vs HMRC – Upper Tribunal – [2024] UKUT 436 (TCC) – Case Summary

Introduction

The Upper Tribunal (Tax and Chancery Chamber) has refused permission for Steven Hague to appeal a decision made by the First-tier Tribunal (Tax Chamber) regarding tax assessments and penalties imposed by His Majesty's Revenue and Customs (HMRC). The case centred around discovery assessments and penalties related to unpaid income tax and capital gains tax spanning nine consecutive tax years from 2007-08 to 2015-16.

Background

The First-tier Tribunal (FTT) dismissed Hague's appeal against HMRC's decisions, which included nine discovery assessments totalling £67,177.01 and nine penalty assessments amounting to £43,665.06. These assessments were issued under section 29 of the Taxes Management Act 1970 and Schedule 41 to the Finance Act 2008, respectively. The FTT upheld the discovery assessments as valid, finding them raised within statutory time limits and based on 'best judgment'.

FTT's Findings

The FTT rejected Hague's explanations that the assessed income stemmed from non-taxable sources such as family gifts, inheritance, and gambling. It concluded that Hague failed to prove the income was not undeclared earnings from his work at a family-owned pub, the New Tyke Inn, during the relevant years. The tribunal highlighted inconsistencies in Hague's evidence, undermining his reliability as a witness.

Capital Gains Tax and Penalties

The FTT also found Hague liable for capital gains tax on the profit from a property sale, which he failed to declare. The tribunal determined that Hague had deliberately failed to notify HMRC of his tax liabilities, justifying the penalties imposed.

Application for Permission to Appeal

Hague's application for permission to appeal to the Upper Tribunal was initially refused by the FTT. Hague renewed his application, which was again refused on the papers by Judge Rupert Jones. Hague requested reconsideration at an oral hearing, where he was assisted by his former accountant acting as a McKenzie friend.

Upper Tribunal's Decision

Judge Rupert Jones refused permission to appeal, concluding that Hague's grounds did not raise any arguable errors of law in the FTT's decision. The judge found that the FTT was entitled to rely on the evidence presented and that Hague's submissions amounted to a disagreement with the FTT's factual findings rather than identifying legal errors.

Fresh Evidence Application

Hague sought to introduce fresh evidence, including statements from witnesses asserting he only worked at the New Tyke Inn between 2008 and 2011. The Upper Tribunal refused to admit this evidence, noting it could and should have been obtained earlier, and it lacked cogency to significantly impact the appeal's outcome.

Conclusion

The Upper Tribunal concluded there were no arguable errors of law in the FTT's decision, and Hague's appeal was dismissed. The tribunal's findings on the validity of HMRC's assessments and penalties remain in place.

Learn More

For more information on tax disputes, see BeCivil's guide to UK Tax Law.