Assessment based on two sales invoices

HMRC encountered some problems contacting taxpayer who was a sole trader to check his VAT returns and records. He had submitted nil returns between December 2013 and September 2016 and claimed he was no longer trading. In September 2015 the officer issued an information notice (FA 2008 Sch 36) but the taxpayer took no action.

In a compliance visit to a business owned by one of the taxpayer’s customers HMRC found two sales invoices issued by the taxpayer. These showed he was trading and therefore his nil returns were incorrect.

The officer noted that the difference in the number series between the two sales invoices was 128 over a three-week period so raised a best judgment assessment based on the taxpayer issuing 43 sales invoices a week (VATA 1994 s 73(1)). 

The taxpayer appealed. He said he did not issue the invoices and...