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Lack of evidence of taxable income

06 March 2020
Issue: 4735 / Categories: Tax cases
S McMillan (TC7595)

HMRC issued discovery assessments to the taxpayer on the basis that regular deposits into his bank account were taxable trading income.

The taxpayer appealed. He said his money was entirely winnings from gambling football bets and poker and therefore was not taxable.

He said he stopped gambling in 2010 because he wanted to change his unhealthy lifestyle. Any records that he had kept he discarded then. Given that HMRC began its enquiry in October 2013 his statutory obligation to retain his records had ceased by 31 January 2013.

The First-tier Tribunal said HMRC had provided no evidence that the taxpayer had engaged in trade. The taxpayer could not produce any records of his gambling winnings but he consistently denied any other source of income. Further under ‘thorough cross examination’ he and his witnesses kept ‘strictly to the facts’ within their knowledge and ‘made every effort...

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