In Ingenious Games v HMRC [2015] UKUT 0105 (5 March) the UT found that HMRC could allege dishonesty when questioning witnesses even though those allegations had not been made in its statement of case. The taxpayers were limited liability partnerships (LLPs) and the main substantive issue was whether the LLPs had carried on a trade with a view to profit.
This was an appeal from a case management decision by the FTT. The burden of proof lay on the LLPs and a key document to their case was an information memorandum. HMRC’s line of questioning in relation to this document suggested (or implied at least) that it was alleging dishonesty.
The LLPs’ grounds of appeal were therefore that the FTT had ‘erred in permitting unpleaded allegations to be made’ and that the hearing should have been adjourned.
The UT agreeing with the FTT found that...
