April 24, 2025
LONDON: The UK tax authority, His Majesty’s Revenue and Customs (HMRC), has dropped the case against Tariq Mir, the former senior Muttahida Qaumi Movement (MQM) leader, and also paid towards his legal costs, while continuing the case against other senior MQM leaders, including Altaf Hussain, the movement’s founder.
Mir told the court that he was not responsible for MQM’s debt to HMRC — amounting to £1,476,406.08 — and that he had not received the claim form issued and posted to him by HMRC.
The court considered Mir’s application, and the judge found in his favour, setting aside the default judgment against him. Mir then appealed HMRC’s underlying decision to hold him responsible for MQM’s tax at the Tax Tribunal.
Before the case could be heard, HMRC discontinued the proceedings and agreed to contribute towards his legal costs, which they have now paid.
While the case against Mir has been discontinued, it is understood that HMRC continues to seek recovery of the unpaid tax from Altaf Hussain.
HMRC has obtained charging orders against two properties in Altaf Hussain’s name in the sum of £1,525,794.52 (which includes interest on the original debt).
Altaf has challenged one of the charging orders on the basis that the property is held in trust for MQM and he holds no beneficial interest in it. Regarding the second property, his position is that he owns it personally and it should not be used to pay MQM’s debts. Altaf Hussain has also applied to have the judgment against him set aside.
In August 2013, HMRC began an investigation into MQM's tax affairs after receiving information from the Metropolitan Police Service that MQM was making payments to some of its members without deducting tax.
The case began during the Met Police investigation into the killing of Dr Imran Farooq in London. Around the same time, the police launched a money-laundering investigation into Altaf Hussain, but later dropped it due to insufficient evidence for prosecution.
In September 2016, HMRC issued 14 Notices of Determination against MQM for the tax years 1997 to 2011. In October 2016, MQM appealed these notices, but the appeals were rejected. In June 2020, HMRC issued a further seven Notices of Determination for the tax years 2012 to 2019.
HMRC’s investigation focused on payments made to several party members, including Altaf Hussain. MQM argued that the payments to Altaf were gifts, given his leadership role in the party.
HMRC rejected this argument, asserting that the payments constituted living expenses and were therefore taxable. HMRC relied on a letter in which Altaf Hussain asked party members to raise £1.5 million for his divorce settlement, stating that his only “income” came from the party.
Due to the non-payment of the sums demanded, HMRC issued a debt claim against four MQM officers it deemed responsible. On June 5, 2023, HMRC obtained default judgment against Mir, Altaf, and two others for £1,476,406.08.
Mir claimed he was unaware of HMRC’s claim, having left MQM around a decade ago. He maintained that he was never an employee of MQM and was not involved in its financial matters, and thus should not be personally liable for any tax owed by the party.
In his application to set aside the default judgment, Mir told the court he had joined MQM as a volunteer, motivated by a desire to contribute to the country through health and education.
He said this passion guided his efforts at MQM, as evidenced by his involvement in the establishment of a reference library for students, a charity school serving over 1,100 children, a functioning university, and both a children’s and general hospital in Karachi and Hyderabad.
The hearing of Altaf's application to set aside the judgment and to contest the interim charging orders is scheduled for May this year at the County Court at Barnet. Altaf Hussain has denied any liability and maintains that he owes no taxes to HMRC.
Tariq Mir was represented by Stone White Solicitors and Old Square Tax Chambers.