HMRC have generally argued that, once they reasonably establish an initial case against a taxpayer, the burden of proof passes to the taxpayer—and their financial experts. In practise, this can mean requests for reasonable information that seem to be, well, unreasonable.

The UK courts have been inconsistent in their treatment of burden of proof claims, and, last month, the First-Tier Tribunal (FFT) Tax Chamber (Judge Robin Vos) issued a new decision laying the burden of proof reasonably required under a taxpayer notice squarely at the feet of HMRC alone. In Perring v HMRC [2021] UKFTT 110 (TC), the FTT rejected HMRC’s “established initial case” argument, providing some protection for all financial experts who prepare fiscal reports.

The appellant’s expert was Gary Brothers of The Independent Tax and Forensic Services LLP. The decision can be viewed here. Of particular interest to business valuers is the analysis of inconsistent First-Tier burden-of-proof decisions in sections 58-65. The judge’s response to the appropriateness of the individual requests for information about tax liabilities from payments within a pension scheme begin in Section 109, and these offer new guidance to experts facing tax notices.