Recent Court Decision: MA Rouf v HMRC -Court of Session [2009] 6 XA96/07: HMRC Victory

March 18th 2009

Mr Rouf was a Dundee restaurateur and the case against him was based on survellaince of his premises and meals bought by HMRC staff which suggested sales suppression. Incomplete records and bank accounts held overseas also featured. The assessments brought out an extra £300K of tax before interest and penalties. His accountant took the case at the General Commissioners and gave evidence before them but Mr Rouf gave no evidence there.The Commissioners had confirmed the HMRC assessments as Mr Rouf had not discharged the onus on him of showing they were wrong.

The Court refused his appeal. There was indeed an onus on the taxpayer to show HMRC’s assessments were wrong and Mr Rouf had erred by not giving evidence at the Commissioners hearing. Quoting an earlier case Lord Osborne said,

 ” if a taxpayer does not “come completely clean, and if he gives no evidence whatsoever he cannot be surprised if he is finally lumbered with more than he has in fact received”.

Although HMRC’s calculations were estimates and based on only three secret shopper visits there was nothing inherently irrational about the calculations and as Mr Rouf had given no evidence there was nothing to upset the assessments.

This case illustrates the importance of getting all the evidence out at the Commissioners or, as it will be from 1 April 2009, the First Tier Tribunal.