Bangla Lounge (Harborne) & Anor v The Commissioners for HMRC

12 September 2024

[2024] UKFTT 831 (TC)

First-tier Tribunal

Two restaurants were assessed for underpaying VAT. The judge agreed they underpaid but reduced one restaurant's bill because HMRC made some mistakes in their calculations. The judge refused to hear the restaurants' late complaints about penalties because they waited too long to complain.

Key Facts

•Bangla Lounge (Harborne) and Bangla Lounge (Hall Green) appealed VAT assessments and penalties.
•HMRC alleged suppressed takings.
•Appellants admitted suppression but disputed the extent.
•Appellants made late applications to amend grounds of appeal and for late appeals against penalties.
•Test Eat reports were used by HMRC to assess suppression.
•Appellants challenged the accuracy of Test Eat Reports and Drinks to Total calculations.

Legal Principles

Test for granting permission to amend grounds of appeal.

Quah v Goldman Sachs International [2015] EWHC 759 (Comm)

Time limits for raising VAT assessments under Section 73 Value Added Tax Act 1994.

Section 73 Value Added Tax Act 1994

Time limits for raising VAT assessments under Section 77 VATA 1994.

Section 77 VATA 1994

Test for whether a VAT assessment is raised to best judgment.

Van Boeckel v Customs and Excise Commissioners [1981] STC 290; Rahman t/a Khayam Restaurant v Customs and Excise Commissioners [1998] STC 826

Burden of proof in a VAT assessment appeal.

Case law (implicit)

Test for granting permission to make a late appeal.

Martland v HMRC [2018] UKUT 178 (TCC)

Time limits for raising penalties under Schedule 24 to the Finance Act 2007.

Schedule 24 to the Finance Act 2007 (implicit)

Outcomes

Appellants' applications to amend grounds of appeal dismissed.

Proposed new ground (assessments out of time) lacked real prospects of success.

Both VAT assessments were raised to best judgment.

HMRC provided sufficient evidence of suppression; Appellants' challenges were insufficient to show assessments were spurious or unreasonable.

First Appellant's VAT appeal allowed in part; Second Appellant's VAT appeal dismissed.

First Appellant successfully demonstrated some inaccuracies in the Test Eat Report calculations leading to a reduction in the assessment; Second Appellant failed to do so.

Both Appellants' applications for late appeals against penalties dismissed.

Significant delays, insufficient reasons for delays, and limited prospects of success on the merits.

Bangla Lounge (Harborne) & Anor v The Commissioners for HMRC

Key Facts

Legal Principles

Outcomes

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