Walton v R & C Commrs

 [2009] TC 00273

The taxpayer traded as a wholesale florist and submitted his Self Assessment tax return for the year in question. HMRC commenced an inquiry into the return, contending that it was incorrect, as the business records made available during the enquiry did not support the sales figure shown in the accounts and the business profit was understated. The taxpayer appealed against a closure notice and amendments issued by HMRC under TMA 1970, s. 28A(1) and (2) and against discovery assessments issued by HMRC under s. 29. The taxpayer appealed on the grounds that the assessments were wholly unrealistic bearing in mind that the business was failing due to competition and falling demand. Furthermore, HMRC had not taken account of wastage in arriving at their conclusions and moneys from other sources available to the taxpayer.


It was held by the First Tier Tribunal that the taxpayer had failed to satisfy the burden of proof required in arguing that the assessments were incorrect. It was noted that the business books and records did not support the self assessment return as submitted and that the gross profit rate that HMRC had used to determine the assessment was fair. The taxpayer had produced no specific evidence to challenge the assessments and it was noted that the taxpayer had been vague and unconvincing in his arguments. He had frequently changed his account to HMRC of the operation of his business. HMRC’s assessments were therefore upheld.