In Golamreza Qolaminejite aka Anthony Cooper v HMRC [2019] TC4277, “Cooper” a business tax investigation covered many years. It was the First Tier Tribunal's (FTT's) role to consider the burden of proof from two different angles, from the burden of displacing an assessment and that of demonstrating culpability in order to allow a late assesssment.

  • In 2006/7 there were nine deposits into Mr Cooper’s bank account. These were, in HMRC’s parlance, “unexplained” (meaning, of course, not that Mr Cooper had offered no explanation but that HMRC were not satisfied with it).
  • HMRC thought that the deposits were undisclosed business receipts and assessed Mr Cooper for tax.
  • Mr Cooper appealed the assessment. The burden of proof was on him show that, on the balance of probabilities, the assessment was wrong.  

The FTT was not satisfied that the evidence showed, on the balance of probabilities, that the deposits in question had some source other than trading activity.

  • HMRC was outside normal tax enquiry time limits for a Discovery Assessment
  • As assessment could be only validly made if omission of the income was attributable to Mr Cooper’s deliberate conduct. The Tribunal helpfully paraphrased it as, “that Mr Cooper knew that he had trading income and made a deliberate decision not to declare it”.  The burden of proof for that lies with HMRC. That is also established and uncontroversial law.

The FTT considered that in order to discharge the burden of showing that Mr Cooper knew that he had trading income, HMRC would first have to satisfy the Tribunal that the deposits in question were in fact (on the balance of probabilities) trading income. They had, in the Tribunal’s view, failed to do that.  It’s worth setting out the Tribunal’s thinking:

HMRC have not set out to prove (even on the balance of probabilities) that the unidentified deposits represent undeclared trading income. Clearly they suspect that this is the case based on Mr Cooper’s known expenditure and the lack of any other credible explanation for the source of the funds and, in the context of the assessment itself, have been content to leave it up to Mr Cooper to try to discharge his burden of proof in showing that the deposits in fact represent some other source of funds. That however is very different to HMRC showing that the deposits are more likely than not to be trading income.

We are therefore left in a position where, although Mr Cooper has been unable to produce sufficient evidence to persuade us that the deposits do not represent trading income, there is also insufficient evidence for us to be able to say on the balance of probabilities that the deposits are in fact trading income.

HMRC had therefore failed to discharge their burden of proof; the assessment was not validly made and had to be discharged.


This abridged case write up is published courtesy of BKL. For BKL's full write up, comments and links to their services see Cooper case write-up by BKL.

Useful subscriber guides on this topic

Discovery Assessments
UPDATE: When can HMRC issue an assessment outside of the normal statutory time limits? What conditions must be met? What are your rights of appeal and defences?

How to appeal an HMRC decision
What type of a decisions are appealable? What are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External links

Golamreza Qolaminejite aka Anthony Cooper v HMRC [2019] UKFTT 0713 (TC)

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