“The company, based in the United Kingdom, is engaged in the wholesale distribution of wines and other alcoholic beverages. It was incorporated in June 2002 and conducts its business from its registered headquarters located at Westcliff-on-Sea, South East England. The company distributes a wide range of alcoholic beverages such as red wines, white wines, grape wines, gins, rums, beers, brandies, champagnes, whiskeys, cocktails, neutral spirits, and other distilled alcoholic beverages. The company primarily distributes its products in the United Kingdom.” 21. The Report records Award Drinks as having six employees. These included a Ms Shasna Kay who was responsible for the company’s accounts and banking and a Ms Nicola McCardell whose responsibilities included dealing with the couriers who brought large quantities of cash in sterling from France. 22. Award Drinks was registered for VAT with effect from1 August 2002 . Its application for registration (on form VAT1), completed by Mr Judd on15 August 2002 , described its business as “wholesalers of beers, wines and spirits” and gave an estimate for its an annual turnover at£10m . 23. In addition to being registered for VAT, Award Drinks was registered as a “high value dealer” under theMoney Laundering Regulations 2003 with effect from1 April 2004 and remained so registered (under the applicable legislation) until14 February 2014 . 24. Following a members voluntarily liquidation Award Drinks, on26 June 2013 , appointed a liquidator. At that time its director was Mr Judd and the Company Secretary was Mrs Tanya Judd. Award Drinks ceased to be registered from VAT with effect from2 July 2013 on the basis that it had stopped trading. Contact with HMRC 25. Having been registered under the Money Laundering Regulations and being registered for VAT Award Drinks was subject to several visits from and meetings with officers of HMRC. 26. On15 October 2004 HMRC officers visited Award Drinks. The purpose of the visit was to ensure that systems and processes were in place to detect, report and prevent money laundering and to educate the trader in the requirements of the Money Laundering Regulations and confirm it was operating all aspects of CATCH, an acronym for the following actions to be undertaken by a trader: (1) C ontrol of business by having anti-money laundering systems in place; (2) A ppointment of Money Laundering Reporting Officer; (3) T raining of staff; (4) C onfirming the identity of customers; and (5) H olding of all records for at least five years 27. Mr Judd, who was interviewed at the 15 October visit, told the officers that the business bought and sold wines, beers and spirits for trade to Europe, mainly to public cash and carry companies in Calais. Although the visit report notes that there were “no suspicious transactions to report” it noted that the majority of cash paying customers cash and carry stores in France and that “one person is employed to collect the money for goods delivered from the bonded warehouses in France to cash and carries.” 28. The report notes that it was: “… emphasised that he [Mr Judd] must explore and confirm the legitimate source of the cash and the motive/reason for [the] transaction with the customer and suggested that this be included on the report sheet for making a decision to report to NCIS. Transactions must be judged against standard or routine transactions.”
“Mr Judd is aware of the requirements to comply with MLR2003/POCA 2002 [Money Laundering Regulations2003/Proceeds of Crime Act 2002 ] and the STRs [suspicious transactions] must be reported to NCIS. Procedures in place to prevent and forestall money laundering – the company has a policy of requesting detailed information to identify customers as bona fide companies and Mr Judd will visit them personally prior to the acceptance of a trading agreement. Only Mr Judd and one employee are involved in the receipts of payments and the employee is to receive full training following my visit. Letter issued highlighting the points of weakness in compliance identified.”
“Trader is fully aware of the requirements but is not compliant with all aspects of CATCH. Areas of non-compliance are being addressed.” 29. The letter referred to in the report is, dated22 October 2004 , from HMRC to Mr Judd at Award Drinks and states (with emphasis as in the letter): “As you are now aware theMoney Laundering Regulations 2003 (MLRs) require you to maintain systems and training to prevent money laundering. These include internal reporting procedures, customer identification procedures and record keeping procedures. The purpose of my visit was to ensure that you understood the regulations and that you were operating effective anti-money laundering controls. … We reviewed your anti-money laundering (AML) policies and procedures and identified several areas where improvement must be made to comply with your legal responsibilities and I am now formally bringing these to your attention. Systems and Training Regulation 3 requires you to set up procedures of internal control and communication as may be appropriate for the purposes of forestalling and preventing money laundering. To enable the business to identify suspicious activity you must firstly assess and evaluate the risk of being used by money launderers. This means identifying how, where and from whom cash can be accepted, and ensuring that a coherent framework is in place to protect the business. You are strongly advised to record these arrangements. Alongside this is the importance of the provision of reliable data on all large cash payments to manage and test your procedures cannot be understated. … Internal Reporting Procedures … You were strongly advised to create an internal report form to record full details on the circumstances involving large cash payments to enable you to make informed decisions on the legitimacy of each transaction. Your judgements and opinions on the status of the transactions should be included. Authorised disclosures to NCIS should provide complete details of the customer and the reasons for your suspicion. Consent obtained from NCIS and/or given to staff must be recorded as evidence. Customer Identity I have read HVD [High Value Dealer] Guidance (MLR 7) and Para 9.12 indicates the procedure you need to adopt for dealing with another business. The information you have already taken from your customers would appear to be sufficient to comply with the Regulations. 30. A subsequent visit to Award Drinks by HMRC officers to review the commerciality and appropriateness of procedures in the light of the increased understanding of the type of trade undertaken took place on23 June 2005 . The report of the visit notes that the officer was told that Award Drinks: “trade exclusively in France. Buys and sells stock under bond in France. Goods sold out of bond mainly to cash and carry outlets based in Calais.” 31. It was also noted that, “Mr Judd displayed good knowledge of legislation and legal responsibilities.”
“ (i) Control of business by having anti-money laundering systems in place (reg 3) Confirmed all departmental guidance received and held. Mr Judd displayed good knowledge of legislation and legal responsibilities Control activity is focused on acquisition of customer ID (see below) and managing cash collection and delivery. When self collected, cash is declared to French Customs and a certificate obtained (example in folder) as evidence of legitimate commercial payment if stopped by UK Customs. Payment by customer courier: due to security issues the same courier is normally used by a customer and evidence of identity is obtained and held by trader. A fax is also required from customer advising the amount of payment and when. However, fax does not provide name of courier. Break in audit trail and a specific risk when “relief” couriers are occasionally used but are not identified. Also certificates from French customs not obtained. … (iv) Confirming the identity of customers (reg 4) Trader has a small base of regular customers – approx. 8 and others come and go. Mr Judd claims to travel to Calais every other week and routinely visits customers, covering all in 3 month period. New customers are said to be vetted by Mr Judd and TVR numbers verified on Europa web site. Customer binders are maintained containing TVA cert, business utility bill, French cert of incorporation, and evidence of ID for key personnel, couriers. Is this sufficient to meet due diligence to ensure customers, and their representatives, are legitimate business people????” 32. Following the visit, a letter, dated19 July 2005 , was sent to Mr Judd at Award Drinks. It contained recommendations to improve compliance with theMoney Laundering Regulations 2003 (the regulations then in force). 33. The material parts of that letter state: “As a dealer in excise goods you operate in an industry that is at high-risk of being used by money launderers. An initial visit was made to your premises in October 2004 to review your anti money laundering (aml) procedures, resulting in a letter dated 22 October providing guidance in specific areas. The purpose of my visit was to consider progress on the improvement of aml procedures in light of the growing experience of the HVD [High Value Dealer] regime. In order to ensure compliance with, and avoid any penalties under aml legislation relevant businesses must undertake appropriate due diligence with respect to customers as well as agents and representatives acting on their behalf. This is best accomplished by performing background checks on customers wherever possible. Effective “know your customer” (kyc) procedures are a fundamental risk-control measure for organisations vulnerable to money laundering. Procedures should ensure that customers are legitimate business people and have a valid reason for paying in cash. Audit trails should also be created to evidence the movement in cash and demonstrate that all payments originate from a legitimate customer. Systems and Procedures of Internal Control I reviewed again how you control your business with a view to forestalling and preventing money laundering. The stated reasons for the high levels of cash transactions within your business are: · You deal predominantly with cash & carry warehouses based in Calais · Your customers chose to pay you in cash because they themselves are paid in cash sterling by the ultimate customer (British tourists in foreign cash and carries) · Cash is transported across the English Channel to avoid payment of sterling into French banks and save on currency exchange costs”
“The movement and handling of such large amounts of cash pose significant security issues and health and safety concerns. However, I am still uncertain on the commercial justification for taking such risks. Please provide details of the cost differences and/or commercial benefit of transporting cash for paying into a UK bank as opposed to banking in France. It would also be prudent to obtain evidence from your customers to substantiate the high throughput of cash sterling through their outlets.”
“Business records are maintained using Sage 50 accounting software. As an invoice based system you state that there is no field to record the method of payment which undermines your ability to monitor and control relevant business. Lack of access to transaction dates also hinders official testing of your aml procedures and will reduce the level of assurance obtained. You agreed to contact your supplier as a matter of urgency to explore improvements to your system. Please advise the outcome of your enquiries. It is also important to have audit trails in place that evidence the amount of cash and demonstrate that all payments originate from your customers in France. For cash payments collected by you (or you employee), a declaration of all cash being carried is made to customs on export from France (under Article 464). A certified document is obtained for inclusion in your records. This is seen as good practice and it is strongly recommended that you extend this procedure to obtain and hold a certified document from French Customs for all cash payments received ie ensure this protection is adopted by your customers when using their own couriers. The practice of obtaining an advance notice of payment by facsimile from your customer in France is also considered to be good practice. To further reinforce audit trails I recommend that the notice includes the name and status if the courier in all cases.”
“I reviewed your arrangements for establishing the identity of your customers. Your stated procedures require customers to produce commercial documents to confirm their credentials as an active trading enterprise. These include certificates of incorporation, utility bills, and French VAT numbers. Additionally you travel to France and make at least one personal visit to all customers within a period of 3 months. You also call for evidence of identification of couriers regularly used by customers. However you have yet to establish the identity of the beneficial owner(s) of each business. Another weakness is that you do not call for evidence of identity of all couriers. You must have checks in place to establish and record the authenticity of the businesses you are trading with, the responsible person you are dealing with in that business and any person making payment on their behalf. You should ensure that any representative or courier holds evidence that he is acting on the authority of your customer. … Record Keeping Procedures Regulation 6(2)(b) [of the 2003 Money Laundering Regulations] requires you to maintain a record containing details relating to all transactions involving high value payments. Currently the Sage 50 software cannot meet this requirement, as it cannot produce a detailed report of cash payments received. Consequently you rely on hard copy monthly summaries of invoices raised to your cash customers, plus copy receipt books. You offer undefined credit facilities to your customers resulting in sporadic bulk cash payments that require breakdown and allocation to respective invoices. The resulting audit trail is difficult and time consuming to follow and I recommend that you also record the receipt number against the relevant invoice. Your transaction record must contain details of every high value payment accepted and provide a clear and visible audit trail of supplies made to payments received.”
“Trader remains non compliant in a high risk trade sector. Trader has failed to identify his customers and has not mitigated high risk by undertaking additional due diligence checks regarding commerciality and origin of funds. HIGH RISK.”
“Trader is not fully aware of the requirements of CATCH. Trader has failed to implement systems and procedures to comply with CATCH.” 38. Further details of HMRC’s concerns are apparent from the letter, dated20 December 2005 , sent to Award Drinks following the visit. This concludes that Award Drinks had failed to establish procedures of internal control and communication appropriate for the purposes of forestalling and preventing money laundering as well as having failed to maintain identification procedures requiring its customers to provide satisfactory evidence of identity. Only facsimile copies of documents were kept rather than the originals as required by the regulation. 39. The letter records that HMRC were told that Award Drinks only accepted high value cash payments from customers who operated cash and carry businesses in France. The explanation given was that it was common for such businesses which sold predominantly to booze cruise customers from the UK to accept cash payments in sterling as credit or debit cards were not generally accepted. French banks were not willing to accept large quantities of cash in sterling and had withdrawn account facilities. The letter also refers to the three methods for accepting cash adopted by Award Drinks, collection by Mr Judd or his courier from customers in France, payment by the French customer or its courier and remote payment into its bank account. In relation the first of these methods HMRC had been told it was the policy of Award Drinks to issue a receipt to the customer on acceptance of payment and declare all monies to French Customs and obtain a certificate of exportation for its records. However, as a result of enquires subsequently made by HMRC of the French Authorities (see below) it transpired that no such declarations made by Award Drinks. 40. As a result of the letter Award Drinks instructed a Mr Alec Leighton of Charterhouse International, a former officer of the Metropolitan Police, to produce an anti-money laundering guidance. Although an undated copy of such guidance was produced there was no evidence that it had been applied in practice or, as Mr Judd asserted, that Mr Leighton had provided any training for the staff of Award Drinks. 41. On30 November 2006 HMRC conducted a further visit to Award Drinks and met with Mr Judd and Mr Leighton. The visit report notes that “new guidance” had been provided and that Award Drinks confirmed that “payments (in cash) brought by courier from France” must be lodged, ie declared to French Customs. Under the sub-heading “comments on compliance” the report states: “Trader has designed new anti aml procedures which are to be implemented for all new customers, this includes obtaining additional information on source of funds. Currently trader has obtained ID of the owners and the premises in most cases but the information is limited to passports, utility bills and company registration documents. Trader must undertake further checks because of the risks involved in this trade sector. A further visit will be made to review evidence received for customers under the new procedure. Trader remains HIGH RISK.”
“It has also been brought to my attention that movements of cash and securities from France totalling or exceeding€7,600 must be declared to French Customs. As a responsible trader, you must ensure that you or your customers comply with this legal requirement where cash originating from France forms all or part of a High Value Payment to you. … As part of a risk based approach, you must obtain and hold a copy of the declaration certified by French customs as part of your records of due diligence. It should form a key part of the audit trail of checks and balances in place. You should now take immediate steps to ensure your procedures comply with this requirement and mitigate the risk of money laundering.” 43. On22 July 2009 HMRC officers visited Award Drinks in relation to supplies made to a non-UK customer. The report of the visit records that they were told by Mr Judd that Award Drinks supplied the French market with alcoholic and soft drinks using French and Belgian bonded warehouses. 44. A report of a subsequent visit, which took place on31 March 2010 and refers to Award Drinks and Ampleaward, records that: “The traders receive the payments from their customers by TTS [telegraphic transfer] and by Cash. They have registered as High Value Dealers. The Courier company “Roy Little” from France used to deliver the cash at their office premises. But last year there was a robbery in their office and the traders lost£100,000 . After this incident the traders don’t keep the cash in their office. The same courier brings the cash and deposits into the account of the companies at different branches like Blackheath etc.” 45. Award Drinks was notified by letter of23 December 2011 that it was being included in the HMRC Monitoring Project. This was in part due to its links with other alcohol supply chains which had been noted by HMRC as risks in its particular trade sector. A follow up visit took place on11 January 2012 . The report of that visit records that the officer was told that Award Drinks sold, under bond in France, to cash and carry retailers who paid for the goods in cash (sterling) which was brought to Award Drinks by courier. It refers to the robbery in 2009 and the loss of£150,000 and that to prevent a re-occurrence the cash and carries had arranged for third party payments to be made by bank transfer. 46. Although the report of the money laundering compliance visit of30 November 2006 stated that Award Drinks should be subject revisited “in three months”, the next such visit HMRC took place on19 January 2012 . The report for that visit records that Mr Judd informed the officers that there were at that time only two customers paying in cash and that that by the end of February 2012 all payments would be by bank statement or cheque and that high value cash payments would cease. The report concluded that, given the explanations provided by Mr Judd, its customer due diligence, reporting, record-keeping, internal control risk assessment and management and monitoring and management of compliance was “satisfactory”
“ES [Officer Soleman] asked PJ [Mr Judd] what cash and carries are goods delivered to. PJ replied Mammouth, Atout Commerce, P and P and Scorpion. PJ advised some companies are also based in UK. These are Scorpion Trading Company and Canyon Trading Company based in Rochester Kent. ES asked PJ to define trading company. PJ defined it as a company that never sees its products. PJ went on to elaborate on the French cash and carries. He advised that Mammouth had ceased trading. Others were B and A, Boissant, Embassy, DPC. Referring to Mammouth PJ advised that it was a cash and carry and as far as he was concerned when the goods were sold to Mammouth they were sold on to other companies. ES asked PJ to describe the procedure. PJ advised that once the sale had happened Mammouth would instruct to deliver to bond or to deliver out of bond. When this happens PJ will arrange for the French Duty to be paid. … ES asked which companies pay in cash. PJ replied Mammouth and Atout Commerce. PJ advised that he had ceased trading with Mammouth Trading who had disappeared and left him with a bad debt. Another company that pays by cash is B and A. They use the same courier. 49. After referring to the robbery that had taken place at Award Drinks and confirming that there was no insurance in place, Mr Judd told the officers that the courier for Mammouth was a David Charles Luff, who also acted as courier for Atout Commerce. He said that Mammouth would inform Award Drinks, by fax or email, of the courier’s details, the amount of cash and details for whom the payment was being made. Following the robbery, Mr Judd said that the courier would deposit the cash in Award Drinks’ bank account and, for security purposes, would use various branches although the main branches used were Eltham and Blackheath. Sample paying-in slips shown to the officers although sequentially numbered did not show Mr Luff to have been the person making the deposit. 50. The note of the meeting records that the officers were told by Mr Judd that Mr Luff normally travelled: “… through Euro tunnel. PJ assumed he drives. Once he was over he would present the cash in to the bank using paying in books. PJ then showed ED examples of tickets given to PJ to support proof of travel. However none of these tickets had any printed names on them. ES asked how these tickets were delivered to PJ. PJ advised stubs were brought in by the courier on an infrequent basis but not on the date of travel.”
“… from June 2011, the company ceased all contact with the authorities and, in particular failed to comply with obligations to file returns.”
“… it regularly file its declarations in 2010 but stopped doing so after June 2011. It declared intra-Community acquisitions over this period. However, it systematically and artificially adjusted the amount of VAT recoverable to the amount of the gross VAT due, although it has never paid VAT. … [The French authorities] carried out, in 2011/12, an audit on CLOCKWORK DISTRIBUTION EURL covering the period from01/11/2009 to31/05/2011 . As we were unable to meet the director or his authorised representative, in order to gain access to accounting records and documents, and in order to be able to speak with him, we drew up on13/12/2011 an official report of the failure to cooperate with a tax audit. On27/04/2012 we notified the company of assessment of unpaid VAT: on intra-Community acquisitions not declared:€0.12 million – on sales not entered in the accounts or not invoiced;€0.73 million . We refused the deduction of VAT for€3.14 million . We imposed a surcharge of 100% (€3.8 million ) for failure to cooperate with a tax audit. Despite our recover action, the tax debt of CLOCKWORK DISTRIBUTION (€7.8 million =€3.8 million of VAT +€4.0 million of penalties and interest) has not been recovered.” 64. 1320 Route De Saint Omer is the address given for Atout Commerce, Romtrad, H.A.M. Distrinord and Mammouth Trading. Officer Bailey did not find any trace of these companies on his visit to this address which was a little further from the centre of Calais along the Route De Saint Omer from number 215G. The only building at this address, which he described as a “hexagonal-shaped”, was a serviced office with a number of post boxes outside. The only reference to any business was a sign for Vins Moins Cher. 65. In his evidence Mr Judd said that companies operating out of 1320 Route de Saint Omer, the “Boozers Business Centre”, were not cash and carry outlets (although he had previously asserted that, like all of Award Drinks customers, they were cash and carry outlets). The centre, which the French tax authorities report, as “a building which accommodates several different companies at the same time” and “well known to the department”, had no storage space. The companies operating from it acquired goods which they directed be supplied directly to customers operating cash and carry outlets customers who Mr Judd said would be paid in cash sterling and, using these cash sums, pay Award Drinks. 66. An undated report from the French tax authorities provided to HMRC records that: “After investigation, it turns out that ATOUT COMMERCE has not visible activity, despite its “active” status on the companies register. It has been impossible for investigation officers to contact the company’s manager despite many tries … his whereabouts can’t be found”
“… had no visible activity at its headquarter address: 1320 route de Saint Omer, 62100 CALAIS. Nevertheless, this company is still active regarding the French commercial registration. We unfortunately have tried several times to contact the manager of this company … and were unable to locate this person” 67. A letter to HMRC, dated4 July 2013 from the [French] Ministère de L’Économie et des Finances in response to a request from HMRC, “… pertaining to investigations into a suspected tax evasion Involving wholesale cash & carry trade of alcohol notes that: “Our French Customs colleagues have done checks and can confirm the following: The three French companies stated on the request, namely ATOUT COMMERCE, MAMMOUTH TRADING and B+A Importation do not exist anymore The directors of those companies are not French nationals and it is this highly unlikely that our colleagues manage to obtain anything from them They have no traces of David Charles LUFF and no cash declarations have been made by this person in France.” 68. The report of the French tax authorities on Romtrad, dated19 October 2012 refers to it being a “suspicious trader” against which “opposition to a tax inspection” action was initiated because of the inability to access its records or speak to a director or authorised representative. A report on H.A.M. Distrinord of10 July 2010 records that the French tax authorities: “… went to the address of the registered office, 1320 route de Saint Omer on several occasions, without being able to meet a single member of staff there. The registered letter with acknowledgement of receipt sent to the company in order to initiate proceedings to exercise our right to inspect goods, was returned to us bearing the statement “post box could not be identified”
“The persons who were there stated that they were employees of another company, and that GLASS had permanently left the premises in March 2012. GLASS EURL thus unexpectedly terminated its business activities without notifying the authorities, or the secretariat of the Commercial and Company register. The company has no bank account in France. It has not filed any VAT returns since it was formed. It did not file an return for profits for corporation tax purposes. GLASS EURL may therefore be regarded as a suspect cash-and-carry trader. All action taken to contact the company failed. It has therefore not been possible to examine the books of accounts or any other documents which may be requested. On the grounds of this obstructive activity, we are considering initiating action for non-compliance with a tax inspection.” 70. Parc Eurocap is a large industrial estate in the Coquelles area and is the stated address of Champion Drinks. However, when he visited the unit was closed and Officer Bailey was unable to locate Champion. A report of the French tax authorities, dated18 September 2012 , notes that: “The company CHAMPION DRINKS EURL was the subject of accounts verification proceedings covering the period from01/06/2010 to31/05/2011 . During the first control session on26/08/2011 we found that the premises of the registered office were closed and that the company was no longer carrying out any business activity there. We did not meet with any representative of the company. Under the circumstances we have been unable to obtain the books and accounting documents. Therefore, on 26/08/11 we initiated “opposition to a tax inspection” action against CHAMPION DRINKS EURL. At the close of these proceedings we proposed, on29/05/2011 , taking action against the company.” 71. In addition to the above reports on23 November 2012 the French tax authorities informed HMRC that they were unable to provide any information from documents held by Oversea: “… because when they went to the company’s registered office they were unable to meet with an authorised representative of the company.” 72. HMRC did not produce reports from the French tax authorities regarding the remaining businesses listed at paragraph 2, Forever Drinks, Vins Mons Chers and Premier Cash & Carry. The only information provided in regard to and UB Negociant was that it was struck off on27 March 2014 . Seizure of Goods 73. On28 August 2012 a consignment of 24,984 of mixed beer and the vehicle trailer was seized by the Revenue Fraud Detection Team of the UKBF, under theExcise Goods (Holding Movement and Duty Point) Regulations 2010 , at the UK inward freight control at Eurotunnel in Coquelles. The consignment had been made under an ARC number that had been used for an inward shipment of alcohol on24 August 2012 for delivery to Charlton Cash & Carry at the bonded warehouse of Seabrook Warehousing Limited (“Seabrook”) and had not been delivered by4 September 2012 . Checks of the Departmental database by Officer Stephen Llewellyn of UKBF established that the haulage arranger, Scorpion in London Limited, Seabrook and Charlton Cash and Carry had all been involved in previous seizures. 74. A letter, dated7 September 2012 , requesting restoration of the goods was sent to the National Post Seizure Unit of UKBF by M&R Tax Advisers Limited on behalf of Scorpion of London Limited. This explained that: “… the relevant goods were in the process of being transported from our client’s underbond account at Contrama Logistique in Saint-Martin Les Boulogne, France to the underbond account of our client’s proposed customer Charlton Cash and Carry Ltd at the UK excise bonded warehouse Seabrook Warehousing Ltd. Our client had purchased the goods from Award Drinks Ltd.” 75. However, in the absence of evidence of proof of ownership the request for restoration of the goods was refused. There has been no appeal against that decision. Discussion and Conclusion 76. Although this appeal was highly contested over five days with further written submissions being provided on behalf of both parties we agree with Mr Howard, who in his “supplemental closing submissions” for Award Drinks, said that “at its heart this is a simple case” that has been made “needlessly complicated and confusing” by HMRC. 77. In essence, this case concerns an appeal, by Award Drinks, against “best judgment” assessments to VAT made by HMRC under s 73 VATA. We remind ourselves of what Carnwath LJ in Khan said about such cases (having already referred to this at paragraph 10, above): “The position on an appeal against a 'best of judgment' assessment is well-established. The burden lies on the taxpayer to establish the correct amount of tax due: 'The element of guess-work and the almost unavoidable inaccuracy in a properly made best of judgment assessment, as the cases have established, do not serve to displace the validity of the assessments, which are prima facie right and remain right until the taxpayer shows that they are wrong and also shows positively what corrections should be made in order to make the assessments right or more nearly right (See Bi-Flex Caribbean Ltd v The Board of Inland Revenue (1990) 63 TC 515 at 522–523 per Lord Lowry).’ That was confirmed by this court, after a detailed review of the authorities, in Customs and Excise Comrs v Pegasus Birds Ltd[2004] EWCA Civ 1015 ,[2004] STC 1509 . We also cautioned (see[2004] STC 1509 at [38]) against allowing such an appeal routinely to become an investigation of the bona fides or rationality of the 'best of judgment' assessment made by Customs: … It should be noted that this burden of proof does not change merely because allegations of fraud may be involved (see eg Brady (Inspector of Taxes) v Group Lotus Car Companies plc[1987] STC 635 at 642,[1987] 3 All ER 1050 at 1057–1058 per Mustill LJ).” 78. The assessments in this case were made on the basis of the deposits made at various branches of Barclays Bank throughout the UK into the account of Award Drinks which, HMRC say, relate to taxable supplies. These are, as in any other “best judgment” appeal, prima facie right and remain right until the taxpayer shows that they are wrong and also shows positively what corrections should be made in order to make the assessments right or more nearly right. 79. The bona fides or rationality or the sum assessed by the “best of judgment” assessments in this case were not challenged. Award Drinks simply contends the assessments are wrong saying it did not make taxable supplies in the UK. It asserts that it sold goods in France and that the sums lodged in its bank account related to in-bond sales of alcohol to cash and carry outlets in and around Calais. These outlets accepted cash in pounds, sterling, from UK tourists and “booze cruise” day trippers (see eg paragraphs 33 and 39, above). Award Drinks asserts that it and its customers arranged for the cash to be delivered by courier and deposited at various branches of its bank. 80. There was no positive documentary evidence adduced by Award Drinks, and nothing from the entities from which Award Drinks was said to have received payments that they were genuine retail cash and carry operators or genuine wholesalers that had made any payments to Award Drinks. There was a distinct absence of cash declarations to French Customs by couriers, customers or appellant. Moreover, cheques said to be from three different French Customers, Champion, Glass and Ducain were drawn on same UK bank account. 81. There was also, in our judgment, a complete lack of commerciality in the transactions said to have occurred. No costs analysis was provided by Award Drinks comparing the costs of French banking facilities to cost of couriers despite this being requested by HMRC. It is, in our view, just not credible to contend, as Award Drinks does, that French cash and carry operators would bear costs of couriers to banks throughout the UK without any recompense from Award Drinks. Also, there was no rational explanation for cash deposits being made all around the UK but not in the branches nearest the channel ports or Eurotunnel terminus. In the absence of evidence, we cannot accept Mr Judd’s assertion that this was because the Dover branch of Barclays would not accept cash payments. In addition, there was no evidence to connect any named courier with any of the deposits, nor was there any evidence of travel by any courier. 82. As a result, we find that the factual case advanced by and on behalf of Award Drinks is not supported by the evidence and does not hold water. In our judgment it is not sufficient to displace the assessment which therefore remains “right”