UK Tax Authority Drops Case Against Former MQM Leader Tariq Mir

LONDON: His Majesty’s Revenue and Customs (HMRC), the UK’s tax authority, has dismissed the case against Tariq Mir, previously a senior figure in the Muttahida Qaumi Movement (MQM). HMRC has also contributed to his legal expenses, while simultaneously pursuing legal action against other prominent MQM members, including the party’s founder, Altaf Hussain.

Mir informed the court that he should not be held accountable for MQM’s debt to HMRC, which totals £1,476,406.08, stating that he had not been properly served with the claim form issued by HMRC.

The court took Mir’s appeal into consideration, and the judge ruled in his favor, overturning the initial judgment against him. Subsequently, Mir contested HMRC’s decision to hold him liable for MQM’s tax obligations at the Tax Tribunal.

Before the tribunal could hear the case, HMRC ceased the proceedings and consented to cover a portion of Mir’s legal fees, which have now been disbursed.

While the case against Mir has been discontinued, HMRC is reportedly still seeking to recover the outstanding tax amount from Altaf Hussain.

HMRC has secured charging orders against two properties under Altaf Hussain’s name, amounting to £1,525,794.52, inclusive of interest accrued on the initial debt.

Altaf has challenged one of the charging orders, arguing that the property is held in trust for MQM and that he possesses no ownership rights. Regarding the second property, his stance is that it is his personal property and should not be utilized to settle MQM’s debts. Altaf Hussain has also requested that the judgment against him be set aside.

In August 2013, HMRC initiated an investigation into MQM’s tax affairs following information received from the Metropolitan Police Service indicating that MQM was compensating some members without deducting applicable taxes.

The inquiry began during the Met Police investigation into the murder of Dr. Imran Farooq in London. Concurrently, the police initiated an investigation into Altaf Hussain for money laundering, but it was later dropped due to insufficient evidence.

In September 2016, HMRC issued 14 Notices of Determination against MQM for tax years spanning 1997 to 2011. MQM appealed these notices in October 2016, but the appeals were unsuccessful. In June 2020, HMRC issued an additional seven Notices of Determination for tax years 2012 to 2019.

HMRC’s investigation centered on payments made to multiple party members, including Altaf Hussain. MQM contended that the payments to Altaf were gifts, considering his role as the party’s leader.

HMRC dismissed this argument, asserting that the payments were living expenses and therefore subject to taxation. HMRC referenced a letter where Altaf Hussain solicited £1.5 million from party members for his divorce settlement, stating that his sole “income” originated from the party.

Due to the outstanding payments, HMRC filed a debt claim against four MQM officials deemed responsible. On June 5, 2023, HMRC obtained a default judgment against Mir, Altaf, and two others for £1,476,406.08.

Mir asserted that he was unaware of HMRC’s claim, having left MQM approximately a decade prior. He stated that he was never an employee of MQM and was not involved in the financial operations, therefore he should not be held personally liable for any taxes owed by the party.

In his application to overturn the default judgment, Mir informed the court that he initially joined MQM as a volunteer, driven by a desire to contribute to the nation through enhancements in health and education.

He detailed that this motivation influenced his efforts at MQM, which included his involvement in establishing a reference library for students, a charitable school serving over 1,100 students, a functioning university, and both children’s and general hospitals in Karachi and Hyderabad.

The hearing for Altaf’s application to set aside the judgment and dispute the interim charging orders is scheduled for May at the County Court at Barnet. Altaf Hussain has refuted any liability and maintains that he does not owe any taxes to HMRC.

Tariq Mir was represented by Stone White Solicitors and Old Square Tax Chambers.