SpC 680 (2008) Smith v HMRC

Onus of proof and presumption of continuity- HMRC won 

Case Summary: 

Unexplained deposits in a bank account were assessed and as no evidence was produced by the taxpayer to show that they were wrong the assessments stood- even though one had been made under the wrong statutory provision.

This case also illustrates the presumption of continuity. In one year it was known that Mr Smith’s personal expenditure had gone through his employer’s credit card. HMRC assessed other years too on the basis that the same practice had occurred. As Mr Smith did not show the assessments were wrong they were confirmed.