Key Facts
- •Café Jinnah LLP appealed an HMRC assessment under the Eat Out to Help Out Scheme (EOHOS).
- •HMRC sought to claw back £63,766.30, alleging overstated claims for meals sold in August 2020.
- •The appellant argued that cash receipts were higher than credited by HMRC.
- •The appellant used a manual ordering system with handwritten bills, not a till.
- •HMRC's assessment was based on a lack of dated and timed bills as primary evidence of cash takings.
- •The Tribunal considered the subjective and objective reasonableness of the assessment.
Legal Principles
For an assessment to be valid, the officer must demonstrate both a subjective and an objective opinion that the appellant was not entitled to the support payment claimed.
Tribunal's interpretation of paragraph 9(1), Schedule 16 FA 2020, and section 29 TMA.
Subjective test: The officer must believe the information available points towards an insufficiency of tax. This is more than mere suspicion but doesn't require a conclusion that insufficiency is more probable than not.
Jerome Anderson v HMRC [2018] UKUT 159
Objective test: The officer's belief must be one a reasonable officer could form on the information available. The tribunal doesn't substitute its own belief for the officer's.
Jerome Anderson v HMRC [2018] UKUT 159 and HMRC v Tooth [2021] UKSC 17
HMRC bears the burden of proving the assessment's validity. If successful, the burden shifts to the appellant to demonstrate overcharge.
Tribunal's determination.
EOHOS required traders to keep records on the number of diners, total discount, and value of meals sold.
EOHOS guidance and paragraph 3.1 of the EOHOS Direction
Outcomes
Appeal allowed.
The assessment was not objectively reasonable. The officer unreasonably rejected the appellant's evidence (handwritten bills and daily takings records) despite sufficient corroborating evidence (RTI records, accounts, change in eating patterns).