In Haron Mayet v HMRC [2025] TC09406, the First Tier Tribunal (FTT) found that a taxpayer had deliberately submitted inaccurate self-assessment returns for 20 years, by not declaring income receipts totalling £1.3 million.   

Lady of Justice

Haron Mayet (HM) was South African-born but resided in the UK, owning a UK property management business established over many years. Self Assessment returns were submitted annually, declaring him a UK resident for tax purposes.

  • MH initially traded as a sole proprietor, before forming a partnership and later Incorporating Alliance Residential and Commercial Limited (ARCL).
    • HMRC believed that before incorporation, HM did not declare all of his trading income.
    • After the incorporation of ARCL, HMRC believed an undeclared parallel trade was being run alongside the newly formed company.
  • HMRC raised assessments and Penaltiescovering over 20 years on the basis that income from the property management business, and interest from bank accounts held in the Isle of Man, were not fully declared.

HMRC raised the assessments based on the view that HM’s actions were intentional and Deliberate.  

  • S.29(1) and (4) TMA 1970 allows HMRC to raise a Discovery assessment if the officer believes income that ought to have been taxed has not been taxed and the inaccuracy was careless or deliberate.
  • The time limit for discovery assessments raised on careless behaviour is six years, but this is extended if HMRC can prove there was a deliberate intention to submit inaccurate returns.

HM argued that bank accounts held in the Isle of Man belonged to family members who had moved the funds there due to exposure and financial uncertainty in South Africa. HM stated that all funds had been repatriated to South Africa and tax paid thereon.

  • HM believed HMRC were harassing him by looking into his tax affairs. He also asserted that he was, in fact, a South African citizen and not a UK resident despite declaring otherwise on his UK tax returns.

HMRC’s arguments were:

  • With the assistance of the South African authorities, proof was obtained that HM was not a resident of South Africa nor had tax been paid in South Africa for the years in question.
  • Although HMRC was unable to obtain details of days spent in the UK for some years, based on his London address, his UK trade and bank accounts with a regular flow of credits and debits, made it reasonable to determine HM was a UK resident for tax purposes.
  • Information obtained from the Isle of Man showed the accounts were held in HM’s name. Income totalling over £1.3 million had been deposited into the accounts from UK bank accounts. HMRC believed these to be suppressed trade receipts.

The First Tier Tribunal (FTT) found that:

  • Actions such as using private bank accounts for business purposes were indicative that the business was not run legitimately.
  • Given the number and pattern of deposits in the Isle of Man accounts, it was reasonable to assume that HM was not providing full records of his income to his accountant, otherwise, the additional receipts would have been declared correctly.
    • The unexplained deposits exceeded the declared turnover for the business and it was reasonable to infer that represented undeclared income from the business.
  • His explanations for the deposits had varied and evolved.
  • HM did not declare himself as a non-UK resident at any point whilst submitting Self Assessment returns.
  • The actions to hide the income were clearly deliberate and HMRC were right to raise discovery assessments for the full 20 years.
  • No indication of harassment was found.

The appeal was dismissed.

Useful guides on this topic

SRT: Statutory residence test
What is the Statutory Residence Test (SRT)? Why is it important and how does it determine a person's residency?

Penalites: Self Assessment (SA) late filing, payment, notification and error
Self Assessment (SA) tax penalties: what penalties are due for outstanding tax returns? What penalties are due for late payment? Are there special rules for delays affecting victims of the Post Office Horizon scandal and due to Covid-19?

Penalites: Deliberate behaviour
What penalties apply to deliberate behaviour? What is deliberate behaviour?

Discovery Assessments
When can HMRC issue an assessment outside of the normal statutory time limits? What conditions must be met? Can HMRC issue two alternative assessments for the same period? What are your rights of appeal and defences?

External link

Haron Mayet v HMRC [2025] TC09406

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