Case report: Burden of proof cuts both ways in assessments appeal
In Qolaminejite (aka Cooper)  TC 07485, the First-tier Tribunal (FTT) held that HMRC were entitled to treat income from unknown sources as trading income given the lack of evidence to the contrary from the appellant. The Tribunal also ruled that as HMRC had not proven that the income was from a trade, one discovery assessment could not be shown to be valid on grounds of taxpayer dishonesty, even though the liability was found to be suitable for the calculation of tax-geared penalties.
The appellant, Mr Qolaminejite (known as Mr Cooper) had come to the UK from Iran in 1996. In 2003 he set up a sole trader business, Ship & Ocean, and then in 2004 a company, Ship & Ocean Limited.