Khawaja v HMRC

The decision in Khawaja v HMRC (Upper Tribunal – 13 August) is the latest instalment in a long-running saga. The Revenue had issued assessments on the controlling director of a company which operated an Indian restaurant on the basis that he had received undeclared income which represented undisclosed remuneration from the company. The assessments included rent which the company had paid on behalf of the director benefits in kind and amounts in respect of takings which the Revenue considered had been abstracted by the director without appearing in the company’s records. The director (K) appealed accepting that he was liable to tax on the rental income and the benefits in kind but contending that there had been no undeclared takings. The General Commissioners upheld the assessments in principle but reduced them in amount finding that there had been undeclared...