Brian Hughes v The Commissioners for HMRC

1. This is a case of a fairly conventional kind distinguished by some very unconventional features.

2. It illustrates the importance to the integrity of HMRC's decision-making and the Tribunal process that appellants should tell the truth.

3. There are three key persons: (1) The Appellant, Brian Hughes; (2) His son, Barry Hughes; (3) A haulage company known as 'Barry Hughes Transport Ltd' ( 'the Company' ) trading as 'B Hughes and Sons'.

4. The following facts are not in dispute: (1) On 14 September 2023, officers of HMRC attended a haulage yard at Ballycullen Road in Moy; (2) The yard was operated by one Mr Peadar McIlvanna trading as McIlvanna Transport; (3) Six curtain-sider trailers ( 'the Trailers' ) were parked there, in the Company's livery; (4) The Trailers contained pallets with about 175,000 litres of beer ( 'the Goods' ); (5) None of the loads had any accompanying paperwork; (6) Checks on the Trailers showed that they had travelled from Heysham; (7) The beer was non duty-paid; (8) Mr McIlvanna told Officer Gaston that the Trailers belonged to 'a fella Hughes ... Barry'. He told the officer that the Trailers "belonging to Barry Hughes ... are just dropped off here for storage and then collected again"; (9) Officer Patton spoke to Mr McIlvanna, and wrote: "The only address he provided for Barry Hughes trailer owner was Moy Road"; (10) The Trailers and the beer were seized.

5. On 9 October 2023, solicitors acting for Mr McIlvanna wrote to HMRC that Mr McIlvanna had no interest in the beer or the Trailers. They wrote: "Our client has a reciprocal arrangement with Barry Hughes of 93 Moy Road ... whereby each of them regularly use the other's yard for the purpose of temporary parking of commercial vehicles. So far as our client is aware, Mr Hughes [ie, Mr Barry Hughes] is the owner of the curtain siders ...".

6. Up to that point, a clear and consistent evidential position emerges. Firstly, the evidence from Mr McIlvanna, repeated by his solicitors, was evidence which was ostensibly credible, because it came from someone with direct personal knowledge of the Trailers and how they came to be parked in his yard.

7. Secondly, the trailers were liveried "B Hughes and Sons". That was the trading style of the Company. Publicly available records showed that the Company had been incorporated on 16 September 2019. An earlier company, in which the Appellant had been involved, and trading under the same style, had been dissolved in 2018. The Company had one director - Barry Hughes, whose occupation was described as 'Transport Manager'. The Appellant was not a director of the Company, and never had been. The Company's registered address was Tullygoonigan Industrial Estate, 89 Moy Road.

8. Hence, all that available evidence pointed towards the Trailers belonging to Barry Hughes. He therefore appeared, at the very least, to be a person HMRC should have been pursuing for an explanation as to how the Trailers came to be full of non-duty-paid beer.

9. But, on 19 August 2024 HMRC assessed the Appellant to Excise Duty in the sum of £251,492. This assessment was on the basis that he was liable to pay the Excise Duty as the person 'holding' the Goods, under Regulation 10(1) of the Holding Movement and Duty Point Regulations ( 'the Assessment' ). The Company was also assessed, on the basis that it was liable as a (legal) person involved in the holding, under Regulation 10(2). The Appellant and the Company were assessed as jointly and severally liable.

10. The Appellant appealed the assessment. The Company did not appeal the assessment.

11. Pausing there, the attentive reader will doubtless ask why HMRC did not come to assess Barry Hughes but instead came to assess his father, the Appellant, instead.

12. There is a simple answer to this. The direct cause of HMRC coming to assess the Appellant, and not assessing his son, was this.

13. Shortly after the seizure, the Appellant, through MMD Solicitors (Mr McNamee's firm) made a series of clear, unequivocal, representations, in writing, to HMRC, that the Trailers were owned by the Appellant. HMRC - as it was entitled to do in relation to letters sent by solicitors - treated those representations as accurate and reliable.

14. More particularly, in September 2023, in a series of letters of claim and letters requesting restoration sent to HMRC by email MMD Solicitors wrote: "Our client - Brian Hughes - Brian Hughes and Sons Ltd" "We advise that our client is the owner of this trailer"

15. This letter is immediately confusing because it fails to draw any apparent distinction between the Appellant (a natural person) and the Company (a legal person). Although the true identity of "our client" (note, the singular) is thereby not clear, "the client" cannot have been the Company unless the Appellant (a non-officer) had authority from that Company to give instructions on its behalf. But the notion that Brian Hughes was giving instructions on behalf of the Company is inherently unlikely because, had that been the case, then there is no obvious need for the Appellant to have been named personally at all in the letter. Hence, the inference has to be that the Appellant, Brian Hughes, was giving instructions, and was the client, but somehow he and/or MMD Solicitors had chosen to name a non-existent company as well. It was non-existent because 'B Hughes and Sons Ltd' had been dissolved in 2018.

16. On 6 October 2023, MMD Solicitors wrote 6 letters (1 in relation to each trailer), headed " Our Client: Brian Hughes ", saying in each of them (and with reference to each individually identified trailer): "We advise that our client is the owner of this trailer...".

17. There could be no doubt as to what was being said. Given the stark contradiction between what MMD Solicitors had written (the Appellant was the owner) and the remainder of the available evidence (the Appellant was not the owner) it is entirely easy to understand how Officer Whitaker, tasked with deciding whether to assess, and if so, whom, tied himself in knots in trying to reconcile the two positions.

18. The conundrum facing Officer Whitaker was that, on the face of it, there was nothing to link the Appellant to the Trailers at all, except for what MMD Solicitors had repeatedly and unequivocally asserted to HMRC.

19. Officer Whitaker did his best in trying to reconcile the two positions. In an internal note, he wrote: "It's unclear if Mr Brian Hughes is an employee of B Hughes and Sons or if he has loaned, rented or otherwise allowed use of the trailers to the business."

20. Thus it was that Brian Hughes came to be assessed, and Barry Hughes did not. Because of his intervention, it ended up being the Appellant (a septuagenerian whose company had been dissolved in 2018) and not his son (the owner of the Company, and the person who Mr McIlvanna believed the Trailers belonged to) facing an excise duty assessment for quarter of a million pounds. The ostensible incongruity of the situation had clearly occurred to HMRC, but HMRC yielded to the Appellant's repeated insistence that he was the owner of the Trailers.

21. In his Grounds of Appeal dated 15 November 2024, and signed on his behalf by Mr McNamee, the Appellant said as follows: "This is an appeal which has been premised on the fact that a number of letters of claim were submitted for trailers belonging to Mr Hughes. These trailers had been on hire to Mr James Fulman and they were being used or operated at the time of the seizure by Mr Fulman. The letters of claim and letters requesting restoration were submitted by Mr Hughes as the owner of the vehicles. Both the notices of claim and letters requesting restoration were abandoned subsequent to Mr Fulman paying for the trailers in full and becoming the legal owner of same. Given that none of the trailers were being used or operated by Mr Hughes it is submitted that Mr Hughes cannot be liable for any assessment of duty in relation to the goods which were being carried at the time."

22. So, the Appellant's position that he was 'the owner' was maintained. But a complication was introduced. As far as we can tell, this was the first mention of a Mr Fulman, and an alleged contract of hire which had later turned into an outright sale. Nothing further was said, and no further evidence ever provided, to substantiate the Appellant's new case that, even if the Appellant were the owner, a mysterious Mr Fulman (and, it should be noted, not Barry Hughes) was nonetheless the person who HMRC should have been looking at.

23. On 4 February 2025, one Deirdre Hughes at MMD Solicitors, Mr McNamee's secretary, wrote to HMRC: "We advise that as our client is not the owner of these vehicles, he will not be contesting the application for forfeiture. We had informed UKBF on 21 December 2023 of our client's position".

24. Again, this was to some extent confusing. It does not identify the client, but apparently relates to the Appellant.

25. We do not agree with the asserted effect of the email dated 21 December 2023. On 21 December 2023 Deirdre Hughes wrote to UKBF saying "Please be advised that we have no further instructions in respect of this matter". We reject Mr McNamee's submission to us that the email of 21 December 2023 made the situation clear to UKBF. It did not. MMD's email was in response to one from UKBF (headed: Your client - Brian Hughes and Son Ltd - again, a reference to a non-existent company) saying that UKBF had not received a signed agent's authority from MMD, and asking for the same to be sent.

26. The context of the email exchange was clear - it was whether MMD were instructed to send a signed authority. They were not; and they did not, because they were not instructed to do so. We do not read the letter of 21 December 2023 as saying anything more than that. We certainly do not read it as the Appellant somehow abandoning his position that he was the owner of the Trailers, and we have no hesitation in rejecting Mr McNamee's ambitious submission that it did. The email neither says say so expressly, and it does not convey any such meaning by implication either.

27. On 10 July 2025, a direction was given for each party 'to send or deliver to the other party statements from all witnesses on whose evidence they intend to rely at the hearing setting out what that evidence will be ...".

28. On 29 August 2025, the Appellant signed a witness statement which is in materially identical terms to the Grounds of Appeal (indeed, it is almost entirely cut and pasted from them). It says: "This assessment is premised on the fact that a number of letters of claim were submitted for trailers ... These trailers had been on hire to Mr James Fulman and they were being used or operated at the time of the seizure by Mr Fulman. The letters of claim and letters requesting restoration were submitted by me as the owner of the vehicles. Both the notices of claim and letters requesting restoration were abandoned subsequent to Mr Fulman paying for the trailers in full and becoming the legal owner of same."

29. The witness statement goes on to say: ".. my operator's licence was revoked in 2020. Further, I am 73 years of age and I have been retired since 2020. I have been in poor health for some years. This company B Hughes and Sons has not been operated by me, nor have I had any involvement in the business since this time. This company has been run since 2020 exclusively by my son Barry Hughes. Barry has indicated that he shall provide me with the relevant documentation in relation to Mr Fulman. I shall forward same to the Tribunal and HMRC upon receipt".

30. As far as we are aware, this was the first time that HMRC had been told these things.

31. We make some observations as to this witness statement: (1) It is far from clear what involvement the Appellant had in its production, but he signed it, and therefore it has to be taken as his written evidence; (2) The evidence about the Appellant's retirement from the Company is broadly consistent with what is known on the public record about the Company, its incorporation and direction; and is also broadly consistent with the dissolution of the predecessor business (in which the Appellant had definitely been involved); (3) The signature on the witness statement is not confident or fluent. It is very shaky and hesitant.

32. We now know - but only from documents handed up to us by Mr McNamee at the beginning of the hearing - that the Appellant had sustained an acquired brain injury as a result of a fall in July 2023. On 30 August 2023 (ie, about a fortnight before the beer was seized) he visited the Acquired Brain Injury Rehabilitation Team (ABIRT) at Craigavon. He acknowledged needing support to remember to take mediation etc, and 'Edel' (we presume a person accompanying him) is said to have described cognitive issues pre-dating the brain injury. His ACE-III (Addenbrooke's) tool score was 62/100, with low scores for memory, fluency, and language.

33. As to the other assertions in the Grounds of Appeal seeking to exculpate the Appellant: (1) There is no corroborative evidence at all about any arrangement or dealings of any kind with Mr Fulman; (2) The putting forward, by somebody, at some point, of the copy of a Tanzanian citizen identity card for one James Boniface Fulman which appears in the bundle is not evidence which even remotely answers to that requirement; (3) There is no evidence of any lease or hire to Mr Fulman; (4) There is no evidence of any sale to Mr Fulman.

34. HMRC filed lengthy and detailed witness statements from Officers McGillin and Whitaker. Mr McNamee did not require these witnesses to be called, and their evidence not was not challenged.

35. The Appellant did not file any witness statements from any other witnesses.

36. Taking all the above into account, it has to be said that the prospects of the Appellant's case, immediately before he sat down at the witness table to give his evidence, did not appear promising. Despite the weight of contemporary evidence (and especially that of Mr McIlvanna) that the Trailers belonged to Barry Hughes, the Appellant had, through MMD Solicitors, intervened and successfully caused HMRC to turn its focus to the Appellant instead. The Appellant, through MMD Solicitors, had then repeatedly asserted that he was the owner of the Trailers, and that position had never been resiled from or altered until, as set out below, his oral evidence before us.

37. Mr Hughes gave oral evidence. He was examined in chief by Mr McNamee.

38. In our view, the Appellant's presentation and demeanour were entirely consistent with what had been reported by the brain injury clinic in September 2023.

39. Most importantly for present purposes, when asked - in an open question - as to whether he was the owner of the Trailers, he said no. When asked to explain how his witness statement had come to say that he was, he said that his son had 'put in the claim'. We are not sure that the Appellant really knew much about the Tribunal's processes or, as he appeared before us, had much understanding of the things which had been said on his behalf.

40. At one point in his evidence in chief, the Appellant seemed to suggest that his son was responsible for his witness statement ('my son put that in, I had nothing to do with it. He put in the claim through the solicitors. I didn't go to the solicitors. My son did that') even though the Appellant had signed it. At another point, the Appellant said that he had been to the solicitor's offices.

41. We did not assess the Appellant as giving false oral evidence to us.

42. Our overall impression was that his son had somehow influenced the Appellant to say, falsely, or to go along with it being said, falsely, that the Appellant was the owner of the Trailers. There would have been an obvious financial incentive for Barry Hughes to have done so because - as actually happened - HMRC came to look to the Appellant and not to Barry Hughes, and so Barry Hughes was never assessed to Excise Duty. This is not to disregard the fact that the Company, which is owned and controlled by Barry Hughes, was assessed: but the Company as a legal person and with the benefit of its limited status stands between HMRC and Barry Hughes.

43. The Appellant was cross-examined by Mr Carey. This was done sensitively and courteously and, given what seemed to be the sudden volte-face in the whole thrust of the Appellant's case, with commendable restraint.

44. The Appellant's answers in cross-examination lacked detail and much meaningful content, but we did not assess these as misleading. In our view, the truth of the matter was that the Appellant was not really in a position to tell us anything meaningful about the Trailers because he did not know anything meaningful about them. He did not know because they didn't belong to him at the time of the seizure and had not done so for quite some time.

45. We asked the Appellant about the ID card for Mr Fulman. He did not know where it had come from, and he did not know Mr Fulman. We accept his evidence.

46. We believed the Appellant's oral evidence that he was not the owner of the Trailers: (1) The man described in the September 2023 hospital report was not a man in a condition capable of operating any form of haulage company or doing any sort of deals involving large quantities of smuggled beer in multiple trailers with anyone. Nor was the man before us; (2) The Appellant struck us as a vulnerable elderly individual who could very well have been influenced to give or go along with false evidence that he was the owner of the Trailers; (3) There was no demonstrable link between the Appellant and the Company in 2023. The Appellant was not a director (and had never been one); (4) The fact that the Appellant lives at 93 Moy Road and the Company, for some purposes, uses that address for correspondence does not forge such a link when the Company in fact (and we accept) uses a yard half a mile or so up the road to store its vehicles; (5) The Appellant told us, and we accept, that he has had no role in the Company, neither officially nor unofficially, since about 2020. He does not discuss its business with his son.

47. We therefore find that the Appellant was not the owner of the Trailers at the time of the seizure. We are not making any finding as to who did own them, if not the Appellant. We do not need to do so in order to decide this appeal. We have recorded the available evidence from Mr McIlvanna, which was given at the time, and which Mr McIlvanna's solicitors repeated. We have recorded the available evidence from Companies House. We have recorded our view as to the only evidence relating to Mr Fulman.

48. We also find, insofar as we need to do so, that the Appellant had no link with the Company or the Trailers at the time of the seizure so as to meet the requirements of 'holding' the beer for the purposes of Regulation 10(1).

49. There is an extant and unappealed Regulation 10(2) excise duty assessment against the Company. That assessment stands despite the success of the Appellant's appeal against the Regulation 10(1) assessment.

50. One could well ask how MMD Solicitors came to write the letters which they did; to settle the Grounds of Appeal which they did; and to draft the witness statement which they did. But we cannot answer those questions. There has been no waiver of privilege, and no such waiver can be compelled. We cannot draw any inferences from the absence of waiver, and we cannot speculate as to the reasons for it. We just have to take things as they come to us, which is that MMD Solicitors must have acted on the Appellant's instructions and not on someone else's instructions because they said that the Appellant was their client. It must certainly be the case that the Appellant instructed Mr McNamee to sign the Notice of Appeal on his behalf, because that is what the Notice of Appeal says. It is also must certainly be the case that the Appellant signed his own witness statement, and was content for that to stand as his evidence, even though what it said about ownership was not true and the Appellant cannot, when signing it, have believed it to have been true.

51. Beyond that, all that can properly be said is that MMD Solicitors - if not simply acting as an uncritical mouthpiece for the Appellant - must have satisfied themselves that the Appellant had the requisite capacity to give instructions, approve the Grounds of Appeal, and sign his witness statement. Moreover, and although the old company had been dissolved (which was a matter of public record and hence readily discoverable) and a new company had been formed, not involving the Appellant but involving his son (which was also a matter of public record, also readily discoverable) MMD Solicitors must have formed the view that there was nonetheless a proper forensic basis for the assertions made by the Appellant, and that it was indeed properly arguable that the Appellant was the owner of the Trailers.

52. Beyond that, the Tribunal is not in the position to assess whether MMD Solicitors should have been alert to any risk that the Appellant, in asserting ownership and thereby (in effect) bringing down the assessment on himself, was being subject to some sort of coercive or controlling behaviour by some other person seeking to use the Appellant to draw HMRC's attention away from themselves so as to avoid what was likely to be (and which ended up being) an extremely substantial Excise Duty assessment.

53. Mr Carey accepted that if we were to find (as we have done) that the Appellant was not the owner of the trailers, then HMRC was not pressing any positive case that the Appellant was, apart from ownership, otherwise holding the non-duty-paid goods within the proper meaning and effect of Regulation 10(1), meaning that the appeal would have to be allowed.

54. That was a sensible and fair concession; but it was not one which Mr Carey could have made before hearing the Appellant's oral evidence. Therefore, there cannot be any criticism that HMRC should not have assessed the Appellant in the first place, when it was the Appellant who put himself so firmly and insistently in the frame.

55. As such, and given HMRC's position in this appeal, we do not have to express any concluded views on Mr McNamee's position that HMRC had wrongfully conflated ownership and control for the purposes of Regulation 10(1); but we do say that it would be a mistake to consider this decision (which is not binding on any other Tribunal) as departing from anything said in other cases on that point.

56. Mr Carey did urge us not to accept the Appellant's oral evidence and instead to look to the letters, Grounds of Appeal, and witness statement, and to leave the consequences of dismissing the appeal (namely, a bill for £1/4m) as something to be dealt with between the Appellant and his solicitors.

57. Although it is very tempting to hold the Appellant entirely to the letters written by MMD Solicitors on his behalf, and his Grounds of Appeal, and his witness statement, in our view this would then be wrongly to ignore his oral evidence as part of the overall totality of the evidence.

58. Oral evidence matters, and we cannot disregard the fact that this Appellant was prepared to come to the Tribunal to give oral evidence. Although his evidence happened to depart very materially from his previous assertions, this emerged in examination-in-chief and not in cross-examination.

59. It is not especially unusual for someone to give a witness statement which seeks to exculpate themselves, only for them to depart from that in cross-examination and to inculpate themselves. However, that situation is almost the complete opposite of this one. We have never encountered a person who (in effect) has inculpated themselves repeatedly in writing (when they otherwise were on the face of it unlikely to receive an excise duty assessment) who then seeks to exculpate themselves in examination in chief on the basis that their earlier inculpations were a lie.

60. But that is what has happened here. We do not ignore the written evidence. But we are satisfied that the Appellant's earlier position was wrong and false; and he has given us an ostensibly plausible account - which we believe - as to how that had come about.

61. To ignore the Appellant's oral evidence would also be, wrongly, to ignore the contemporary countervailing evidence from Mr McIlvanna, which did not point at the Appellant at all, but - in a credible and coherent way - at Barry Hughes.

62. We do not draw any adverse inferences from the Appellant's failure to call Barry Hughes or Mr Fulman. If the Appellant is not the owner of the Trailers, and had nothing to do with them or their contents at the time of their seizure, then he cannot realistically be criticised for not calling the people who may well have known something about them.

63. For the same reasons, criticism that the Appellant has failed to produce evidence of the ownership of the Trailers or their alleged hire or their alleged sale falls flat because any such evidence will be held by the Company and/or Barry Hughes and/or Mr Fulman, and not the Appellant. The absence of such evidence does not tell against the Appellant in this case.

64. Ultimately, the assessment of the totality of the evidence is a balancing exercise, where the Appellant bears the burden.

65. Here, the Appellant's oral evidence has ended up, in the perhaps unique circumstances of this appeal, just about discharging the burden on him. His appeal therefore succeeds.

66. We wish to be clear that nothing in our approach or in this decision should be taken as supportive of, or endorsing, any practice where Appellants say one thing through their solicitors and/or in their Grounds of Appeal and/or in their witness statements, and then can come and say something entirely different before the Tribunal and hope or expect to be believed. To advance untruths and then to seek to roll back from them in oral evidence is an exceptionally high-risk litigation strategy to adopt.

67. The Tribunal's procedures, including provision for Grounds of Appeal and witness statements, exist for good reasons. The first is to allow opposing parties (whether that be HMRC or the taxpayer) to assess the strengths and merits of their positions well in advance of the hearing. We do not know, but we express considerable doubt, that HMRC would ever have assessed this Appellant had he not been so insistent he was the owner of the Trailers. Secondly, the Tribunal's procedures seek to allow the Tribunal (which is a public body, paid for by the public purse) to deal with cases fairly and justly. It is certainly arguable that ambush at the hearing is neither fair nor just. Conclusion

68. The appeal is allowed Right to apply for permission to appeal

69. This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Release date: 11 TH MARCH 2026