In Moses Mukuna v HMRC [2025] TC09619, the First Tier Tribunal (FTT) found that tax relief was not available on extensive employment expenses claimed by a bus driver, due to fraudulent behaviour.
Mr Mukuna, a bus driver, amended his tax returns from 2016-17 to 2021-22 to claim extensive expenses against his employment income.
- The expenses claimed totalled £61,200 over the six tax years.
- He said that he incurred additional expenses on Personal Protection Equipment (PPE), sorting out accommodation to protect his family, specialised cleaning detergents and the frequent discarding of clothing as a direct result of being a key worker during COVID. He also claimed expenses for psychological therapy.
- The original receipts were unavailable. Mr Mukuna said that these were stored in his loft and eaten by rodents, so he was unable to provide evidence of the expenditure incurred.
- Mr Mukuna did not provide any evidence of the rodent infestation and could not obtain replacement receipts, as he had paid in cash.
- Mr Mukuna claimed that the expenses were incurred wholly, exclusively and necessarily in the performance of his duties as a bus driver.
- Mr Mukuna's employer did not reimburse him for any expenses and confirmed that there was no requirement to claim any expenses as a bus driver.
- Masks and hand sanitiser were supplied to drivers during the pandemic, which were available at depots.
- Mr Mukuna claimed that the equipment provided by his employer was inadequate.
- HMRC were unable to verify the expenditure claimed, so they issued Discovery assessments for the 2016-17, 2017-18 and 2018-19 tax years and Closure notices for the 2019-20, 2020-21 and 2021-22 tax years.
- Mr Makuna responded with a letter stating that the expenses claimed in 2016-17, 2017-18, and 2018-19 were incurred as a result of injuries he sustained in a road accident in November 2016.
- The breakdown of expenses Mr Mukuna provided in his letter was inconsistent with the expenses he had claimed on his tax returns.
- He claimed that, "It was essential to purchase body harnessing products, customising back support seat cover, compression socks, to enable comfort, in order to carry on with his work duties".
- Again, no receipts were available due to rodents.
- He asked his employer to supply him with clothes and equipment to enable him to continue with his duties following his accident, but they said they were not prepared to provide any, as he was on sick leave.
- Mr Mukuna claimed that, although the accident happened in 2016, he needed to replace the equipment on an ongoing basis to allow him to perform his job.
- The total Income Tax at stake was £18,367, and Penalties of £10,929 were issued for submitting Deliberately inaccurate tax returns.
- Mr Mukuna Appealed against the additional Income Tax and penalties.
The First Tier Tribunal (FTT) found that:
- The tax officer had clearly considered the information before him and believed that there was an insufficiency of tax. This belief was objectively reasonable based on the evidence provided.
- HMRC did not consider the evidence of careless or deliberate behaviour at the time of making the assessment.
- It was argued that the discovery assessments complied with section 29(5) TMA.
- Mr Mukuna had claimed expenses on costs incurred during the pandemic, yet he had claimed them both before and after the pandemic.
- The variety of amounts claimed by Mr Mukuna on his amended tax returns demonstrated that he did not know what his expenses actually were.
- Mr Mukuna was seeking to mislead HMRC as to the accuracy of his claims.
- Mr Mukuna provided insufficient evidence that the expenses were actually incurred.
- When he amended his tax returns, Mr Mukuna did not have the records of the alleged expenditure available to him due to rodents destroying them.
- Even if Mr Mukuna had incurred the alleged expenditure, the amounts originally claimed and subsequently amended were not based on the precise amounts.
In conclusion:
- Mr Mukuna's behaviour was deliberate. He knew that the expenditure had not been incurred either at all or in the amounts claimed, yet he presented the amounts as a truthful reflection of allowable expenditure.
- HMRC made valid discovery assessments and benefited from the extended time periods of six to 20 years to issue the assessments (for careless or deliberate behaviour).
- The closure notices and consequential amendments are valid and arithmetically correct.
- Mr Mukuna did not establish that the additional Income Tax was overcharged.
- The penalty charged was correct.
The appeal was dismissed.
Useful guides on this topic
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?
Closure notices
When does HMRC issue a Closure Notice? Can a taxpayer demand one? Are there appeal rights?
Penalties: Errors in Returns and Documents (subscriber version)
What penalties apply if you make an error or mistake? Is there a penalty if you fail to tell HMRC about an under-assessment? How are penalties calculated? How do you check penalties? What can you do if you receive a penalty?
Penalties: Deliberate Behaviour
What penalties apply to deliberate behaviour? What is deliberate behaviour?
How to appeal an HMRC decision
Disagree with an HMRC decision? How do you appeal, what type of decision can you appeal and what are your different options when you disagree with HMRC? What are the key steps in making an appeal?
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