The business venture for which a Forest accountant claimed more than a quarter of a million pounds was “a mirage”, a tax tribunal judge said.
The taxman started investigating Graham Wildin amid suspicions that claims for income tax and VAT for a holiday let and file storage business, were, in fact, related to the development of a sports complex at his Cinderford home.
Mr Wildin appealed against HMRC rejecting VAT and capital allowance claims and penalties and surcharges associated with the case.
But a first tier tax tribunal has rejected his appeals which in total are valued at nearly £300,000.
The amounts in question were £83,382.78 in income tax, £157,460 in VAT and £56,787.87 in penalties and a VAT surcharge `– a total of £297,630.65.
The two-woman tribunal decided Mr Wildin was not a “credible or reliable witness”.
Mr Wildin insisted the claims were made for legitimate business expenses and that making a claim for VAT depended on his intention to trade.
He also said his returns were accurate so the penalties were wrong and that he was right to withhold VAT payments because he was owed money by HMRC.
But the tribunal has dismissed the appeals although Mr Wildin does have the right of appeal.
In the judgement, Judge Heidi Poon said: “...the dissonance between the appellant’s contemporaneous statements made at the time to various authorities and the press, and his witness evidence to this Tribunal on the same factual matrix in his testimony, renders any attempt to identify the venture in question in the present case a mirage.”
HMRC began investigating after Mr Wildin gave an interview to a national newspaper in November 2014 about his dispute with the Forest Council over the complex.
Tax claims had been made but in the interview, Mr Wildin had said the complex for his family.
He told the tribunal he had said it was personal use in an effort to make progress in the planning dispute.
Mr Wildin claimed the sports complex would be part of the holiday let based on his property in Meendhurst Road, Cinderford.
In a letter of January, HMRC investigating officer Stuart Ferguson said he believed Mr Wildin had deliberately tried to mislead.
The tribunal found that the sports complex was purely for the use of Mr Wildin, his family and guests and the spending claimed is “plainly unsupportable; the putative trade simply did not exist, and has no prospect of commencing given the demolition order.”
According to the tribunal, there was also insufficient evidence that Mr Wildin intended to run a business or that he currently intends to.
“The infrastructure that is associated with a trade in the commercial letting of holiday accommodation was simply absent…”
The tribunal was also unimpressed with claims of a record storage operation, the only evidence for which was an invoice for £397 issued to family members and a 10-year, unsigned, agreement with his accountancy business.
“While the Tribunal has seen 352 photographs of the ‘estate’…No physical traces of evidence have been led to offer a glimpse of the operational aspects of the record storage activity as a professionally run operation that is in the nature of a trade…”
The tribunal added that HMRC believed the purported record storage activity was a way to make the holiday let business appear a genuine commercial venture within the appellant’s returns and reduce the risk of attracting further scrutiny, and we agree with this observation.”
Mr Wildin was also rebuked for alleging, at a preliminary hearing, that a High Court case was suspended because of a “false statement” by Forest Council solicitor Helen Blundell.
A statement from the judge in the case His Honour Judge Michael Callum, said that any such allegation was false.
The tribunal stated: “We also consider that it is important to record Cullum J’s (Judge Callum’s) statement, and for it to stand as an accurate summary to correct what was otherwise hearsay evidence sought to be relied on by the appellant for the purpose of founding an extremely serious allegation against the credibility of a witness who is a solicitor.’’
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