Background
Parvaiz Akhtar sought permission to appeal a First-tier Tribunal decision concerning VAT assessments for periods from 12/19 to 03/23, totaling £29,199.19. HMRC had issued the assessments under section 73 of the Value Added Tax Act 1994 because Akhtar had failed to maintain sufficient records. The FTT held that HMRC had made the assessments to its best judgment and that Akhtar had not proved that their amounts were inaccurate.
After the FTT refused permission to appeal, Akhtar renewed his application in the Upper Tribunal. The Upper Tribunal initially refused permission on the papers and then reconsidered that refusal at a hearing. Akhtar advanced seven grounds addressing matters including the assessment month selected by HMRC, till records showing “no sales,” an alleged till malfunction, claimed duplication or double counting, a missing sale, and HMRC’s assumed profit margins.
The Court’s Holding
The Upper Tribunal refused permission to appeal because none of the grounds advanced disclosed an arguable error of law in the FTT’s decision. Several contentions concerned factual or evidential matters that had not been raised properly before the FTT. The Upper Tribunal explained that an appeal on a point of law is not an opportunity to relitigate the case or introduce arguments and evidence that should have been presented at the original hearing.
The Tribunal also found no arguable legal error in the FTT’s treatment of the “no sales” records or profit-margin evidence. The FTT was entitled to assess the inconsistent explanations for the till records and to conclude from the evidence as a whole that the unexplained entries were more likely sales not correctly rung up. Two cash-and-carry receipts showed purchase prices and recommended retail prices, but did not establish the margins Akhtar actually achieved over the relevant periods. The Tribunal also refused late witness evidence from Akhtar’s daughter concerning the alleged till malfunction because it was an attempt to introduce evidence that should have been placed before the FTT.
Key Takeaways
- Permission to appeal from the FTT requires an arguable, material error of law; factual disagreements ordinarily do not suffice.
- A party cannot generally fault the FTT for failing to address an argument or evidence that was not properly presented at the hearing.
- Documents included in a hearing bundle are not necessarily treated as evidence relied upon unless the party specifically brings them to the tribunal’s attention.
Why It Matters
The decision underscores the importance of presenting all factual challenges, supporting documents, and witness evidence at the FTT hearing. A renewed permission application cannot be used to reconstruct the evidential case after an adverse decision.
For challenges to best-judgment VAT assessments, taxpayers must do more than identify possible alternative explanations or isolated pricing data. They must place sufficient evidence before the FTT to demonstrate that HMRC’s assessment is excessive or otherwise inaccurate and must frame any later appeal around an identifiable error of law.