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The company traded as a grocer selling food drinks and tobacco and registered for VAT in August 2013.
A review by HMRC into the company’s corporation tax return for 30 June 2017 revealed that sales had been understated checks were extended to years for June 2014 to June 2016. The total understated sales did not increase the amount of corporation tax payable because the difference was debited to director’s remuneration subject to income tax and National Insurance.
A VAT officer became involved on 16 July 2019 but it was not until 23 June 2021 that HMRC issued an assessment for underpaid VAT totalling £23 032. The assessment was issued under VATA 1994 s 73(1) – best judgment – to correct underpaid output tax on past returns.
The assessment went back further than the usual four-year period because the taxpayer’s behaviour had been ‘deliberate’ according...
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