Jurisdiction(s):
United Kingdom

Penalty appeals: taxpayer must disprove underlying liability; HMRC must prove penalty elements — Court of Appeal (England and Wales) in HMRC v Sintra Global Inc and Malde

Published on: 08 January 2026

Published by a LexisNexis Tax expert

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Article summary

The Commissioners for His Majesty’s Revenue and Customs v Sintra Global, Inc and Parul Malde [2025] EWCA Civ 1661 What are the practical implications of this case?

It is settled law that HMRC must substantiate any penalty it imposes. Yet the Court of Appeal in Sintra makes clear that this obligation does not extend to proving the correctness of the underlying tax charge. Consequently, the taxpayer carries the onus of showing the liability is mistaken, while HMRC remain responsible for the penalty’s tailored aspects, including culpability and quantification. The ruling matters most where only the penalty is appealed and there has been no prior determination of the core tax position. The Court of Appeal brings the burden of proof in penalty disputes into line with that which would have applied on an appeal against the substantive assessments themselves. This averts inconsistent outcomes and, in principle, removes any perceived benefit in ventilating the substantive tax points in a forum where the evidential burden would otherwise rest with HMRC. When advancing a defence that turns on the underlying liability in standalone penalty proceedings, advisers should therefore evaluate what material will be needed to discharge the burden of proof and ensure that the...

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