“in our judgment, HMRC are plainly right that…if the challenge to the PLN was brought on the basis that the assessment to VAT on Zamco was wrong, the legal rules relating to the way in which the assessment could have been challenged by Zamco if it had appealed the assessment remain in play in any appeal against the PLN…it is well-established law that it is for the taxpayer to prove, by evidence, that an assessment to VAT issued by HMRC is incorrect. HMRC do not have that evidential burden and that cannot sensibly be affected by the fact that the challenge to the assessment occurs in satellite litigation where, as in this case, a penalty charged on Mr Zaman is sought to be defended on the basis that the assessment to VAT on Zamco was wrong.”
“Takings are recorded in the cash book every night. The cash is rarely banked (perhaps once a month) as it is used to pay the wages in cash. The cash is taken and left at home and is only brought back to pay the wages.”
“You do not agree with my calculations and have detailed the reasons why in your letter. In order for me to understand how you get your daily gross take figure each evening, please detail your procedure for cashing up every night and how you arrive at your Daily gross taking figure, including all the adjustments you make, to cover the reasons you have previously mentioned. How do you know what customers have not paid or refused the food due to lack of funds. What happens to the food that has not been collected, do you keep wastage records as evidence of the waste of food and if this is the case, can you please forward the records to me. When you have new staff that need to train on the till, why do you not use the training mode that is available to prevent any over rings on the sales. Please send in the adjustments you make on the till rolls when a trainee has made an error with the real time mode.”
“In preparing my case for this review request, I have noticed that Mr Gopaul has received a Personal Liability notice for the quarter 11/15. As this is a missing return and the behaviour is an under assessment, a Personal liability notice is not applicable. I will take steps to have this one for£13,881.36 formally withdrawn. The remaining notice for£9,128.56 has been sent for review as requested.”
“For any takeaway business I would typically expect to see all purchase invoices, Hungry House and Just Eat statements, a record of daily gross takings, till rolls or at least till roll Z readings, a record of cash income and cash expenditure with reconciliations, records of wages, company credit card statements, for franchises, a copy of the franchise agreement and documentation to support figures reported in the balance sheet of company accounts submitted. Where the trading entity is a company I would expect to see a director’s loan account detailing all capital invested and withdrawals made by the director…the bank statements and lease agreements sent to HMRC do not support the returns made.”
“I have already detailed how the accounts were prepared. All the facts and figures are available from the bank statements and yet you continue to ask the same questions over and over again. All records are available from the bank statements printed black on white.”
“14. In considering an appeal against an assessment under section 73(1), the approach to be adopted was set out in two Court of Appeal decisions, Rahman (t/a Khayam Restaurant) v Customs and Excise Commissioners[2002] EWCA Civ 181 , and Pegasus Birds Ltd v Customs and Excise Commissioners[2004] EWCA Civ 1015 . The law was more recently summarised by the Upper Tribunal in Mithras (Wine Bars) Limited v HMRC[2010] UKUT 115 (TCC) (Judge Sir Steven Oliver QC). 15. The first stage is for the tribunal to consider whether, at the time such an assessment was made, it was made to the best judgment of the Commissioners. At this stage, the tribunal’s jurisdiction is akin to a supervisory judicial review jurisdiction. As stated by Chadwick LJ (as he then was) in Rahman (at [32]): ‘In such cases…the relevant question is whether the mistake is consistent with an honest and genuine attempt to make a reasoned assessment of the VAT payable, or is of such a nature that it compels the conclusion that no officer seeking to exercise best judgment could have made it. Or there may be no explanation; in which case, the proper inference may be that the assessment was indeed arbitrary.’ 16. Chadwick LJ observed (at [43]) that instances of a failure to exercise best judgment would be rare. As he stated at [36]: ‘…But the fact that a different methodology would, or might, have led to a different—even to a more accurate—result does not compel the conclusion that the methodology that was adopted was so obviously flawed that it could and should have had no place in an exercise in best judgment.’ 17. Where the tribunal is satisfied that the Commissioners have used their best judgment in making the assessment, the second stage for the tribunal is to consider whether the amount assessed is correct. As Mithras makes clear, in relation to this second stage the tribunal has a full appellate jurisdiction. It can therefore consider all available evidence, including material not available to HMRC at the time when the assessment was made, in substituting its own judgment as to the correct amount of the assessment. 18. The courts have emphasised that in most appeals against a best judgment assessment the tribunal’s focus should be on determining the correct amount of VAT. As Carnwath LJ stated in Pegasus Birds (at [38]): ‘The tribunal should remember that its primary task is to find the correct amount of tax, so far as possible on the material properly available to it, the burden resting on the taxpayer. In all but very exceptional cases, that should be the focus of the hearing, and the tribunal should not allow it to be diverted into an attack on the Commissioners’ exercise of judgment at the time of the assessment.’” ‘In such cases…the relevant question is whether the mistake is consistent with an honest and genuine attempt to make a reasoned assessment of the VAT payable, or is of such a nature that it compels the conclusion that no officer seeking to exercise best judgment could have made it. Or there may be no explanation; in which case, the proper inference may be that the assessment was indeed arbitrary.’ ‘…But the fact that a different methodology would, or might, have led to a different—even to a more accurate—result does not compel the conclusion that the methodology that was adopted was so obviously flawed that it could and should have had no place in an exercise in best judgment.’ ‘The tribunal should remember that its primary task is to find the correct amount of tax, so far as possible on the material properly available to it, the burden resting on the taxpayer. In all but very exceptional cases, that should be the focus of the hearing, and the tribunal should not allow it to be diverted into an attack on the Commissioners’ exercise of judgment at the time of the assessment.’”
“What the words 'best of their judgment' envisage, in my view, is that the commissioners will fairly consider all material placed before them and, on that material, come to a decision which is one which is reasonable and not arbitrary as to the amount of tax which is due. As long as there is some material on which the commissioners can reasonably act then they are not required to carry out investigations which may or may not result in further material being placed before them.”
“We contend that there is no statutory basis for issuing new penaltyassessments and, in particular, no statutory basis for issuing a new CT PLN to PG. To issue these HMRC would need to have made a new discovery, but no new discovery was made. Indeed, it was the same HMRC officer raising the new penalty assessments on exactly the same information. There was no new information, no change of view and no change of officer. Therefore there was no discovery.”
“In the case of HMRC v Tooth[2021] UKSC 17 , the Supreme Court unanimously and comprehensively upheld the view that there is no statutory basis for the concept of staleness, and that, once an officer has discovered a loss of tax, the legislation allows that officer to make an assessment at any time, subject only to the time-limits. All these time-limits run from the end of the year of assessment, not from the date of the discovery.”
“It will be my intention to consider the impact of the uplift to the accounts on the Directors Loan Accounts. The omitted sales will be treated as company funds misappropriated by the directors of the company and are regarded as loans or advances to them. This gives rise to liability under CTA10/S455. Relief under CTA10/S458 is available if these misappropriated funds are repaid (or released or written off on or after6 April 1999 ) during the period covered by the enquiry or subsequently. Computations of S455 duties will be submitted and further discovery assessments raised if no additional evidence is supplied.”
“(1) Schedule 24 contains provisions imposing penalties on taxpayers who (a) make errors in certain documents sent to HMRC…” (a) make errors in certain documents sent to HMRC…”
“For the purposes of a penalty under paragraph 1, an inaccuracy in a document given by P to HMRC is (a) ‘careless’ if the inaccuracy is due to failure by P to take reasonable care, (b) ‘deliberate but not concealed’ if the inaccuracy is deliberate on P's part but P does not make arrangements to conceal it, and (c) ‘deliberate and concealed’ if the inaccuracy is deliberate on P's part and P makes arrangements to conceal it (for example, by submitting false evidence in support of an inaccurate figure).” (a) ‘careless’ if the inaccuracy is due to failure by P to take reasonable care, (b) ‘deliberate but not concealed’ if the inaccuracy is deliberate on P's part but P does not make arrangements to conceal it, and (c) ‘deliberate and concealed’ if the inaccuracy is deliberate on P's part and P makes arrangements to conceal it (for example, by submitting false evidence in support of an inaccurate figure).”
“Where a penalty under paragraph 1 is payable by a company for a deliberate inaccuracy which was attributable to an officer of the company, the officer is liable to pay such portion of the penalty (which may be 100%) as HMRC may specify by written notice to the officer.”
“Deliberate is an adjective which attaches a requirement of intentionality tothe whole of that which it describes, namely ‘inaccuracy’.”
“for there to be a deliberate inaccuracy in a document within the meaning of section 118(7) there will have to be demonstrated an intention to mislead the Revenue on the part of the taxpayer as to the truth of the relevant statement.”
“…failed to keep records sales sufficient to challenge a claim by HMRC inrespect of underpaid VAT, Corporation Tax and liability arising underSection 455 Corporation Taxes Act 2010 and as a result did not register for VAT timeously and that Mr Gopaul knew, or reasonably ought to have known, of his duties by virtue of employment with Ladbrokes PLC.”