Cabbie wins fare deal from tax judges

APPEALS COURT JUDGES have sided with a cabbie who faced his tax bill being tripled after the Revenue challenged his self assessment return.

The taxman argued Stephen Ho, who takes fares between London and Heathrow airport, owed £5,400 for the 2003/2004 tax year instead of the £1807 he had declared.

However, judges at the First Tier tax tribunal shot down the taxman’s argument on two counts.

Tribunal judges said HMRC’s conduct was “unreasonable” in assuming daily journeys Mr Ho took between London and Heathrow “two in, two out” always had four fares on board.

Judges added that HMRC’s cashflow test, which probed Mr Ho’s bill payments,  was “flawed” and failed to take the timings of his outgoings into account.

The taxman dropped other investigations into Mr Ho’s tax payments for the years ended 5 April 2003, 2005, 2006 and 2007.

The case dragged on for five years before the tribunal’s decision earlier this year.

In this context, Mr Ho asked the tribunal to award costs against the Revenue and “to consider an award towards the Appelant’s pain and suffering and loss of earnings since the enquiry started in November 2005,” court papers said.


Related reading