Jurisdiction(s):
United Kingdom

England and Wales Court of Appeal clarifies burden in tax penalty appeals: HMRC to prove penalty conditions; taxpayer to disprove underlying liability; Article 6 engaged only for penalties

Published on: 14 January 2026

Published by a LexisNexis Tax expert

Legal News

Article summary

HMRC v Sintra Global Inc and another [2025] EWCA Civ 1661

Mr Malde was deeply involved in the alcohol sector, operating his trade through a network of corporate entities and companies. Among them was Sintra Global Inc (Global), one of those corporate vehicles. HMRC formed the view that Global played a part in the dishonest diversion of alcohol from the EU into the UK, using a technique described as ‘inward diversion fraud’. Global failed to register for VAT and did not declare any VAT or excise duty, nor did it otherwise account for those taxes. HMRC therefore issued multiple decisions and assessments to Global, including:

a notification that it was liable to be registered for VAT
a ‘best of judgment’ VAT assessment under section 73 of the Value Added Tax Act 1994 in the sum of about £8.9m
a penalty assessment under section 123 of, and paragraph 1 of Schedule 41 to the Finance Act 2008 (FA 2008) of approximately £8.7m, in relation to Global’s failure to notify HMRC of its liability to register for VAT for the same period (the registration penalty)
an assessment to unpaid excise duty for the same period of approximately £14.18m
a penalty assessment under...

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