Key Facts
- •Coonley Trading Limited (the company) appealed VAT assessments (£11,400 after amendments) and penalties (£7,281 after amendments) for inaccurate VAT returns (periods 10/17 to 04/19).
- •Adekunle Omisakin-Adeyela (second appellant), the company director, appealed a Personal Liability Notice (PLN) for the penalties.
- •HMRC alleged deliberate inaccuracies in the VAT returns due to missing documentation.
- •The appellants claimed delays were due to lockdown, illness, and difficulty accessing stored records.
- •HMRC conducted a site visit but the appellant did not provide all the requested documentation.
- •Substantial discrepancies existed between the company's claimed input tax and available evidence of purchases.
- •The appellant provided some documentation late in the process, leading to amendments to the assessments and penalties.
Legal Principles
VAT assessments are correct if the taxpayer fails to provide required documentary evidence for claimed input tax.
Value Added Tax Act 1994 (VATA), section 73; Value Added Tax Regulations 1995, Regulation 29(2)(a); Schedule 11 VATA, paragraph 6(3)
Penalties for inaccurate VAT returns are due if the inaccuracies are deliberate. Deliberate behaviour requires the statement (VAT return) to have been deliberately inaccurate when made.
Finance Act 2007 (FA07), Schedule 24, paragraph 3(1)(b); HMRC v Tooth [2021] UKSC 17
A Personal Liability Notice (PLN) can be issued to a company director if the deliberate inaccuracies in VAT returns are attributable to their actions.
Finance Act 2007 (FA07), Schedule 24, paragraph 19
Outcomes
Appeals dismissed.
The company failed to provide sufficient evidence to support its claimed input tax, indicating deliberate inaccuracies in the VAT returns attributable to the director.
Amended VAT assessments of £11,400 upheld.
Insufficient evidence provided for the claimed input tax.
Amended penalties of £7,281 upheld.
Deliberate inaccuracies in the VAT returns due to the director's actions.
PLN upheld.
Deliberate inaccuracies attributable to the director's actions.