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Dispute over correct mix of zero and standard-rated sales

26 April 2022
Issue: 4837 / Categories: Tax cases
Mangio Ltd (TC8442)

The taxpayer was a café which had small number of seats on the premises. It also sold hot and cold food and drink on a take-away basis and provided a delivery service to customers’ homes. A dispute arose as to the correct proportions of standard and zero-rated sales.

The director admitted that there were weaknesses in the record keeping and accounting systems: on-site sales were not separately identified on the till and deliveries were all recorded as ‘corner shop’ and zero rated with no split between standard and zero-rated products. The company also recorded ice cream and hot chocolate drink sales as zero rated. Toasted sandwiches were also coded as cold rather than hot food. Finally a £9 meal deal consisting of a hot pasta dish cup of coffee and salad box was treated as 30% standard rated but HMRC increased this figure to...

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