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The problems faced by HMRC when they carry out mark-up exercises.
KEY POINTS
- HMRC attempted unsuccessfully to project the expected sales figures for a fish and chip shop to check its VAT return.
- Any mark-up assessment based on estimated figures should be made according to the officer’s ‘best judgment’.
- The case is a warning for advisers to ensure that retail clients adopt diligent record keeping and show full openness with HMRC.
- Accountants and business owners sometimes forget that it is the ‘person’ who is VAT registered and not a specific business.
In my childhood days a regular treat used to be fish and chips at the local chippy. If you were fortunate enough to be served by the proprietor’s wife Betty the treat was even better because she slotted in an extra bit of fish and a few more chips as well ...
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