Bowles v R

Fresh expert evidence will not render a conviction unsafe where it is based on unsubstantiated estimates, supplies no reliable evidence of the payments or entitlement asserted, and cannot displace the trial evidence supporting dishonesty. Input tax attributable to one VAT group cannot be claimed to offset output tax owed by a different VAT group.

The appellant was convicted at Reading Crown Court of cheating the Revenue by dishonestly failing to submit a VAT return which should have declared substantial output VAT arising from land sales. He was acquitted on two related counts.

His defence was that he believed unclaimed input tax from land-reclamation work, undertaken by a different VAT group, eliminated the liability. He applied to adduce fresh forensic accountancy evidence. An earlier Court of Appeal hearing had dismissed one ground of appeal but permitted further explanation for the absence of such evidence at trial.

The central issue was whether the new reports could undermine the safety of the jury’s verdict.

1. The application was dismissed. The court accepted that there was a sufficient explanation for the failure to obtain forensic accountancy reports before trial. The appellant’s former solicitors had wrongly believed that the restraint order prevented him from using his own funds. In fact, the order did not prevent an application for funds to obtain such a report.

2. The reports could not undermine the safety of the conviction. Their estimate of unclaimed input VAT rested on uncertain reclamation-cost figures. There was no evidence of bank payments, invoices, or other material showing that the very substantial sums required to generate the asserted input-tax credit had been paid.

3. There was also no legal basis for using input tax incurred by the Ocean Developments VAT group to offset output tax owed by the separate Sea Island Holdings VAT group. The court nevertheless assumed, favourably to the appellant, that he may have believed otherwise.

4. The new material did not displace the powerful trial evidence of dishonesty. The appellant knew that substantial VAT was payable, withheld disclosure of the relevant land sale, did not provide invoices or seek evidence from subcontractors, and later agreed to pay the assessed sum. The accountancy reports therefore did not, and could not, undermine the jury’s verdict.

• Court of Appeal (Criminal Division): In [2010] EWCA Crim 1460, the court dismissed the application to adduce fresh evidence, holding that it could not undermine the safety of the conviction.
• Reading Crown Court: The appellant was convicted on 1 June 2009 of cheating the Revenue by dishonestly failing to submit the VAT return in issue. He was acquitted on two other counts.