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Golamreza – HMRC assessments and the burden of proof

14 July 2021.

In Golamreza Qolaminejite (aka A Cooper) v HMRC [2021] UKUT 118 (TCC), the Upper Tribunal (UT) allowed the taxpayer's appeal in part on the basis that the First-tier Tribunal (FTT) had erred in law in failing to take all of the taxpayer's case into account in arriving at its decision.


Golamreza Qolaminejite (the taxpayer) arrived in the UK in 1996 from Iran, where he had inherited valuable assets. He had a background and interest in ships, aircraft and engineering. He later set up business as a sole trader and subsequently also a limited company. 

The taxpayer appealed to the FTT various assessments to VAT and income tax and associated penalties, in respect of multiple years. The assessments were issued in respect of nine deposits made into the taxpayer's account that HMRC believed to be undisclosed trading income. The taxpayer claimed that he had received the deposits as interest-free loans from a friend, bank loans, and transfers from other accounts.  

The burden of proof in appeals of this nature is on the taxpayer to show that, on the balance of probabilities, the assessments are incorrect.

The FTT found that some deposits into the taxpayer’s bank account were undisclosed business receipts. It was not satisfied with the taxpayer’s explanation, who had not produced documentation in support of his claims that the payments were loans. Accordingly, the FTT concluded that the taxpayer had not discharged the burden of proof in relation to some of the assessments. 

The taxpayer appealed to the UT in relation to the income tax assessments and a VAT assessment which the FTT upheld.

The taxpayer appealed on a number of discrete grounds, most of which were specific to the facts of the case, but the principal ground of the taxpayer's appeal was that the FTT had not properly balanced the probabilities of the taxpayer's case (that the deposits were not trading income) against HMRC's case (that the deposits were trading income).

UT decision

The appeal was allowed in part. 

Although the UT highlighted that even if HMRC had not advanced any case at all, the FTT could have reached the conclusion that the taxpayer had not met the necessary burden of proof (the burden of proof being on him), it decided that the FTT had erred in law.  In its view, the FTT had not properly balanced the probability of HMRC's case that the deposits were trading income. It  had not considered the whole of the taxpayer's case, which included the proposition that the income could not have been trading income because no trading activity had taken place. 

The UT remitted the matter to the FTT for determination. 


The UT has provided helpful commentary on how the burden of proof, in particular the balance of probabilities, should be applied in practice in tax appeals of this nature. The UT has confirmed that the FTT must, when determining a taxpayer's appeal, take the taxpayer's whole case into account.

In another recent decision on burden of proof (albeit in a different context), the FTT stated that the burden of proof in Schedule 36 taxpayer information notice appeals is on HMRC. You can read our commentary on that decision here 

The decision can be viewed here.