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PN Jackson (TC4414)
The taxpayer operated a limousine hire service. HMRC opened an enquiry into his 2011/12 tax return on the ground of a low number of cash payments in comparison to those by card.
The inspector suggested that deposits could be paid by card but the balance was due in cash according to the business’s terms and conditions. Cheques were not accepted.
The Revenue official amended the taxpayer’s return and raised assessments to collect additional tax and National Insurance.
The taxpayer appealed. He claimed the inspector did not understand his business and had overestimated his takings.
The First-tier Tribunal said there was nothing to support HMRC’s contention that the takings had been suppressed – even though the taxpayer’s records fell “very far short of what is acceptable” and it should not be difficult to set up a “client numbering system for the primary records” to show how payments were made.
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