UK Tax Authority Drops Case Against Ex-MQM Leader Tariq Mir

LONDON: His Majesty’s Revenue and Customs (HMRC), the UK’s tax authority, has withdrawn its case against Tariq Mir, a former prominent figure in the Muttahida Qaumi Movement (MQM).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 its legal pursuit against other key MQM figures, including its founder, Altaf Hussain.

Mir argued before the court that he should not be held accountable for MQM’s debt to HMRC, which totaled £1,476,406.08. He stated that he never received the claim form that HMRC issued and sent to him.

After considering Mir’s appeal, the judge ruled in his favor and overturned the initial judgment against him. Subsequently, Mir challenged HMRC’s core decision to hold him liable for MQM’s tax obligations at the Tax Tribunal.

Prior to the hearing, HMRC halted the proceedings and consented to cover a portion of Mir’s legal fees, which have now been disbursed.

Although the case against Mir has been dismissed, HMRC is reportedly still seeking to recover the unpaid tax 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 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 does not have any beneficial rights to it. Regarding the second property, he claims personal ownership and argues it should not be used to settle MQM’s debts. Altaf Hussain has also requested that the judgment against him be set aside.

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

The case originated during the Metropolitan Police’s investigation into the murder of Dr. Imran Farooq in London. Concurrently, the police initiated a money-laundering investigation against Altaf Hussain, which was later closed due to a lack of prosecutable 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 the tax years 2012 to 2019.

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

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

Due to the failure to pay the demanded amounts, HMRC filed 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 ten years prior. He maintained that he was never an MQM employee and was not involved in its financial operations, and therefore should not be personally liable for the party’s tax liabilities.

In his request to overturn the default judgment, Mir informed the court that he joined MQM as a volunteer, driven by a desire to contribute to the country through health and education initiatives.

He stated that this aspiration guided his endeavors at MQM, as demonstrated by his involvement in the establishment of a reference library for students, a charitable school serving more than 1,100 children, an operational 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 challenge the interim charging orders is scheduled for May at the County Court at Barnet. Altaf Hussain has denied any liability and insists that he owes no taxes to HMRC.

Tariq Mir received legal representation from Stone White Solicitors and Old Square Tax Chambers.