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 concluded its case against Tariq Mir, a former prominent figure in the Muttahida Qaumi Movement (MQM). Furthermore, HMRC has contributed to his legal expenses while continuing legal proceedings against other senior MQM members, notably including the party’s founder, Altaf Hussain.

Mir informed the court that he should not be held liable for MQM’s debt to HMRC, which totaled £1,476,406.08, asserting that he did not receive the claim form dispatched by HMRC.

The court took Mir’s submission into account, and the judge ruled in his favor, overturning the initial judgment against him. Subsequently, Mir challenged HMRC’s determination to hold him accountable for MQM’s tax obligations at the Tax Tribunal.

Before the tribunal could hear the case, HMRC halted the proceedings and consented to cover part of Mir’s legal fees, which have since been disbursed.

Although the case against Mir has been dropped, HMRC is reportedly still pursuing the recovery of the unpaid tax from Altaf Hussain.

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

Altaf has contested one of the charging orders, arguing that the property is held in trust for MQM and that he possesses no beneficial interest in it. As for the second property, his stance is that he owns it personally and it should not be used to settle MQM’s debts. Additionally, Altaf Hussain has applied to have the judgment against him overturned.

HMRC initiated an investigation into MQM’s tax affairs in August 2013, prompted by information received from the Metropolitan Police Service indicating that MQM was disbursing payments to certain members without deducting the required tax.

The inquiry began during the Met Police’s investigation into the murder of Dr. Imran Farooq in London. Simultaneously, the police initiated a money-laundering investigation targeting Altaf Hussain, which was later abandoned due to a lack of sufficient prosecutable evidence.

In September 2016, HMRC issued 14 Notices of Determination against MQM for the 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 covering the tax years 2012 to 2019.

HMRC’s investigation centered on payments made to various party members, including Altaf Hussain. MQM contended that the payments to Altaf were gifts, given his leadership position within the party.

HMRC dismissed this claim, contending that the payments constituted living expenses and were therefore subject to taxation. HMRC cited a letter in which Altaf Hussain appealed to party members to raise £1.5 million for his divorce settlement, stating that his sole “income” was derived from the party.

Due to the failure to pay the demanded amounts, HMRC initiated a debt claim against four MQM officials it considered 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 insisted that he was never an MQM employee and was not involved in its financial operations, arguing that 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 had joined MQM as a volunteer, driven by a desire to contribute to the nation through initiatives in health and education.

He stated that this dedication shaped his contributions to MQM, as demonstrated by his involvement in establishing a reference library for students, a charitable school serving over 1,100 students, a functioning university, and both a children’s and general hospital in Karachi and Hyderabad.

The hearing for Altaf’s application to set aside the judgment and to contest the interim charging orders is scheduled for May at the County Court at Barnet. Altaf Hussain has refuted any liability and maintains that he owes no taxes to HMRC.

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