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Pat Willis Eco Ltd (TC5972)
Inadequate records to support claim
The director of the taxpayer said its main business was public relations in particular introducing UK companies to clients in Nigeria for which it earned a commission. However it had received no income from this business since 2011 when it first registered for VAT. It claimed an input tax deduction for this trade.The company also ran a taxi business but was unable to produce full records because of the loss of two computers.
HMRC accepted that the taxpayer had a taxi business but not its PR business. The officer used ‘best judgment’ (VATA 1994 s 73) to disallow input tax of £20 679 claimed on expenses alleged to be relevant to the PR business.
The First-tier Tribunal said the taxpayer could not produce evidence to...
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