Ferati, R v

Factual and Procedural Background

The Appellant, a man of previous good character, was the proprietor of a small restaurant in The City. He engaged an accountant, Attorney A, to prepare annual accounts and tax returns. The income tax returns declared profits resulting in no income tax liability, only modest National Insurance contributions. In early 2016, officers from Her Majesty's Revenue and Customs (HMRC) conducted visits and inquiries, revealing evidence that the restaurant's sales were significantly higher than declared.

On 18 April 2017, the Appellant was interviewed under caution and denied under-declaring takings, claiming Attorney A handled all tax affairs. He produced one daybook and initially offered to provide others, but these were not handed over. The Appellant was charged with seven counts of fraudulent evasion of tax relating to income tax and VAT over multiple years.

The trial took place at Crown Court before Judge Lever and a jury. Expert accountants from both sides agreed that profits had been undeclared, though they differed on the extent. The judge intervened early in the trial to request clarification on the percentage difference between declared and actual profits, emphasizing the importance of the Appellant's knowledge of the discrepancy.

During trial, Attorney A admitted to preparing accounts based on information from the Appellant but was unprofessional in record-keeping. The Appellant gave evidence denying knowledge of any under-declaration, attributing errors solely to Attorney A. The defence successfully submitted no case to answer on two counts, but the jury convicted the Appellant on the remaining counts.

Legal Issues Presented

1. Whether the judge erred in his intervention suggesting an incorrect approach regarding the significance of the percentage difference between declared and actual profits.
2. Whether the judge erred by raising the possibility of collusion between the Appellant and Attorney A, which was not part of the prosecution case.
3. Whether the judge erred in directing the jury that the Appellant's failure to provide certain documents could adversely affect his credibility.

Arguments of the Parties

Appellant's Arguments

• The judge's remarks distracted the jury by conflating turnover figures with profit figures, potentially allowing conviction based on inaccuracies attributed solely to Attorney A.
• The judge improperly suggested possible collusion between the Appellant and Attorney A, which was speculative and not supported by the prosecution case or cross-examination.
• The judge's direction on the non-provision of daybooks undermined the Appellant's right against self-incrimination and reversed the burden of proof by inviting adverse inferences without proper legal basis.

Respondent's Arguments

• The judge’s request for percentage differences was a common-sense approach to aid the jury’s understanding of the significance of discrepancies, and did not prejudice the Appellant.
• While the prosecution did not allege collusion, the judge was entitled to explore all reasonable possibilities raised by the evidence and expert testimony, which included the possibility of joint dishonesty.
• The direction regarding the non-provision of daybooks was appropriate, emphasizing that the Appellant had a legal right not to provide them, and limiting their relevance to credibility, without reversing the burden of proof.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court considered each ground of appeal in turn. Regarding the first ground, the judge’s early trial intervention to quantify the profit discrepancy was deemed a legitimate common-sense aid to the jury's understanding, with no unfair prejudice caused despite some imprecision in referencing percentages. The distinction between turnover and profit was acknowledged but did not undermine the judge’s approach, especially as the defence had opportunities to address it.

On the second ground, the court noted that the possibility of collusion was an obvious inference from the evidence and expert testimony, and the judge’s inquiry on this point did not amount to unfair speculation or prejudice. Furthermore, the law holds the Appellant liable if knowingly concerned in fraudulent evasion, whether acting alone or in collusion, so no direction restricting this was legally required.

Concerning the third ground, the court found that the Appellant’s refusal to provide daybooks, after initially offering them, was relevant to his credibility. The judge’s direction properly emphasized the Appellant’s legal right not to provide the documents and limited the relevance to credibility assessment. There was no reversal of the burden of proof or deprivation of the right against self-incrimination.

Overall, none of the grounds undermined the safety of the convictions.

Holding and Implications

The appeal is DISMISSED.

The convictions for fraudulent evasion of tax stand as affirmed. The decision directly affects the parties by upholding the jury's verdict and the trial judge's directions. No new legal precedent was established by this ruling.