Law firm wins historical tax fraud case

Law firm Freeths has won a historical tax fraud case in Sintra Global and Malde v HMRC.

As the largest tribunal case of its kind, the Tax Tribunal ruled that there was a lack of evidence of trade having taken place in the UK by at least one of the companies.

The Tribunal also ruled that HMRC 's use of its best judgement in arriving at the value of the assessments and penalties was a serious failure to “consider or even evaluate the material ” that was before them.

A series of assessments and associated Personal Penalty Notices were raised by HMRC in 2015 against Malde of up to £25 million.

This was concerning alcohol which was allegedly smuggled into the UK between 2004 and 2014 by two companies, Sintra SA and Sintra Global.

The penalties were raised based on the allegation that he was a director of both businesses and had imported and sold alcohol into the UK without accounting for VAT and duty.

As a result, his assets were frozen for over seven years, one of the longest injunctions in history, resulting in severe reputational damages.

Malde appealed against the assessments and penalties on the grounds that he was neither a director nor shadow director of the companies and that there was no evidence that the companies had ever traded in the UK and therefore could not be liable to UK VAT and Excise Duty.

Judge Brooks upheld all appeals, stating that the evidence from HMRC was “frequently evasive, often obstructive and on occasions inconsistent, contradictory and misleading ”.

Simon Ellis (Pictured), commercial dispute resolution director at Freeths, who brought the case for Parul Malde assisted by Natalia Aguilar and Amy Platt, said:

“Through a painstaking analysis of the evidence, a picture emerged of HMRC 's officers being highly selective in their use of evidence to support their version of the case and, in some circumstances, resisting disclosure of evidence that undermined their case.

“Through a combined team effort, we were able to seriously undermine HMRC 's version of events and to challenge its credibility at trial. ”