Good Choice 2016 Limited & Anor v The Commissioners for HMRC

24 June 2024

[2024] UKFTT 544 (TC)

First-tier Tribunal

A Chinese takeaway and its owner were caught under-reporting their income. The taxman found evidence of hidden bank accounts and missing sales records. The court ruled in favor of the taxman, confirming that the business and owner owed the back taxes and penalties.

Key Facts

•Good Choice 2016 Limited (the Company), a Chinese takeaway, and its director, Mrs Guo, appealed HMRC decisions regarding VAT and corporation tax assessments and penalties.
•HMRC found evidence of suppressed purchases and sales, based on data from a supplier, Total Asia Food Limited (TAF).
•The Company had two undeclared merchant acquirer accounts and a second undeclared supplier account with TAF.
•HMRC applied the presumption of continuity to calculate suppressed sales and purchases.
•Mrs Guo's evidence was deemed unreliable due to inconsistencies and lack of credibility.
•HMRC raised assessments based on best judgment under s73(1) VATA 1994.

Legal Principles

Best Judgment Assessments

s73(1) Value Added Tax Act 1994 (VATA 1994), Van Boeckel [1981] STC 290, Rahman [1998] STC 826, Khan [2006] STC 1167, Pegasus Birds Ltd [2004] EWCA Civ 1015

Presumption of Continuity

Jonas v Bamford [1973-1978] 51 TC 1

Penalty Liability for Deliberate Inaccuracies

Schedule 41 FA 2008, Schedule 24 FA 2007, Tooth [2021] UKSC 2017

Personal Liability Notices (PLN)

para 19, Schedule 24 FA 2007; para 22, Schedule 41 FA 2008

Outcomes

Appeal dismissed.

The Tribunal found that the VAT and corporation tax assessments, penalties, and PLNs were properly raised and the quantum was correct. Mrs Guo's evidence was deemed unreliable and the HMRC assessments were deemed to have been made to the best of their judgment.

Good Choice 2016 Limited & Anor v The Commissioners for HMRC

Key Facts

Legal Principles

Outcomes

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