News - tax cases

Penalty stands

The taxpayer owned a restaurant and was assessed for arrears of VAT for the 12 months from 1 August 1996 based on figures disclosed by him. Customs later amended the assessment to take account of business takings not disclosed by the taxpayer. They also issued a civil evasion penalty assessment for dishonestly evading VAT. The taxpayer appealed against the assessments and the penalty.
Before the VAT tribunal Customs accepted that the amended assessment was invalid and withdrew it. They should have issued either a supplementary assessment or an additional one but by the time of the hearing it was too late to do this. Thus they accepted that the takings for the period in question was as shown on the original assessment but said that for the purposes of the civil penalty regime the tax evaded was higher. The taxpayer appealed to...