Personal liability notice was correctly issued

Paradise Dry Cleaners Ltd was incorporated in May 2004 and registered for VAT in September 2004; it was liquidated in March 2019. Following two visits by HMRC officers to the company’s trading premises in June 2016 – one announced and one unannounced – the officers concluded that output tax had been deliberately understated on returns for August 2009 to May 2016 and issued a ‘best judgment’ assessment (VATA 1994 s 73(1)). The original assessment of £102 170 was reduced to £46 292 after a review and a ‘deliberate not concealed’ behavioural penalty of £24 291 was also issued. The penalty was wholly attributed to the taxpayers who were the company directors so using the powers given by FA 2008 Sch 24 para 19(1) a penalty of £12 145 was issued to each director.

The basis of the assessment was twofold:

• Cashing up procedures –...