First-tier Tribunal (Tax)

[2010] UKFTT 547 (TC)

TC00800

Appeal number: TC/2009/11652

Income tax: trading profits- amendments to self assessment upheld

FIRST-TIER TRIBUNAL

TAX

R AUKSORAITUS Appellant

- and -

THE COMMISSIONERS FOR HER MAJESTY’S

REVENUE AND CUSTOMS Respondents

TRIBUNAL: CHARLES HELLIER (Judge) SONIA GABLE (Member)

Sitting in public in Brighton on 31 August 2010

The Appellant was neither present nor represented

Mr McMeeken for the Respondents

© CROWN COPYRIGHT 2010

DECISION

Absence of the appellant

1.     The appellant was neither present nor represented at the time fixed for the start of the hearing. The tribunal waited 20 minutes and then in the presence of Mr McMeeghan telephoned each of the numbers in the files and papers before it: 0793 050002 from which there was no reply; 01273 739620, where a message was left on an answering service, and 01273202172 where another such message was left. Mr McMeeghan told us that he had heard nothing from the appellant.

2.     We were satisfied that notice had been given to the appellant of the hearing. We concluded that it would be in the interests of justice to proceed with the hearing in the absence of the appellant.

3.     An interpreter had been booked to attend the hearing. We sought the interpreter's evidence as to the translation of a Lithuanian letter in the papers before us dated 1 August 2007. After that the interpreter left.

The Appeal

4.     The appellant appealed against an amendment made by HMRC to his self-assessment for 2004/05 with an overall result that tax of £1,149.50 was assessed as due. The increase arose as the result of an amendment to the appellant's trading profits for the period to 5 April 2005, increasing them by £13,237. This increase reflected:

(1)  cash receipts by, and other credits to, an Abbey National account;

(2)  deposits into a NatWest account;

(3)  expense payments which did not appear to have been paid from the bank accounts and which were therefore taken to have been paid from unbanked, undeclared, taxable earnings; and

(4)  the disallowance of a deduction for £3,880 in respect of wages where HMRC had no evidence that the appellant had any employees.

5.     In a case such as this the onus is on the taxpayer to provide evidence to the tribunal which disproves the adjustments made by HMRC. That is the case because it is the taxpayer who is in the best position to have the relevant evidence and able to bring it forward. Our duty is to  examine the adjustments made by HMRC. If any appear to us, or are proved to be,wrong we may change them. But unless there is evidence which we  find disproves those adjustments or requires them to be changed we will accept the adjustments made by HMRC.

6.     We therefore considered the calculations and documentation relating to the assessments made. We had a bundle of copy documents before us a copy of which had previously been provided to the Appellant. We found nothing in the calculations produced by HMRC from the bank statements and other documents  in that bundle which suggested that those calculations were wrong or unreasonable. Indeed we found that they were reasonable adjustments on the basis of the evidence presented.

7.     The only third-party documentary evidence before us (other than copybank statements) was a letter from the appellant's mother written in Lithuanian and translated for us by the interpreter. In that letter his mother recorded that between July 2001 and April 2006 she had lent the appellant £6,300. This letter did not enable us to conclude that any of the amounts added back to the appellant's profits should not have been. That was because it was not clear from the letter whether any of his mother's lending had been made in the year 2004/2005.

8.     The appellant had had meetings with HMRC. Notes had been prepared of those meetings. They had not been approved by the appellant. But they were the only evidence before us of those meetings. They recorded the appellant's responses to questions from HMRC and to HMRC's requests for additional information. We found nothing in those notes which enabled us to conclude that the adjustments were wrong.

Conclusion

9.     There was no evidence which led us to conclude that HMRC's changes to the self-assessment were wrong.

10.  We therefore dismiss the appeal.

11.  The hearing having taken place in the absence of the Appellant, the Appellant has a right to apply for this decision to be set aside pursuant to Rule 38 of The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (“the Rules”).  The Appellant has a right to apply for permission to appeal against this decision pursuant to Rule 39 of the Rules.  The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.

CHARLES HELLIER

TRIBUNAL JUDGE

RELEASE DATE: 2 November 2010