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The taxpayer was director of Cardiff Cash and Carry Ltd which registered for VAT in October 2016 and deregistered on 21 November 2017. It entered into liquidation in January 2022. The company failed to submit returns for June and September 2017 periods so – after lengthy delays – HMRC issued an assessment for £302 804 using powers of ‘best judgment’ given by VATA 1994 s 73(1). A 100% deliberate evasion penalty was reduced by 10% for co-operation and 10% for disclosure and the net penalty of £242 243 was wholly transferred to the director. HMRC has the power to issue a penalty to a director if it is ‘attributable to the dishonesty of a person … who was a director or managing officer’ (VATA 1994 s 61).
The taxpayer claimed that he had passed all responsibility for tax and accounting issues to third parties...
