Deliberately suppressed sales and purchases of goods

The company registered for VAT on 25 May 2019 but HMRC identified that there were two supplier accounts with Total Asia Food Ltd and only one of the accounts – the ‘invoice account’ – had been included in the business records. The ‘cash account’ transactions had been excluded indicating that the business had suppressed both sales and purchases of stock.

HMRC issued a ‘best judgment’ assessment under VATA 1994 s 73(1) to assess output tax of £2 970 and £2 173 for periods August and November 2019. It also backdated the date of registration to 1 July 2017 and calculated a further output tax liability of £27 412. In addition HMRC issued penalties for failing to register at the correct time and for deliberate behaviour that led to output tax being underpaid. The officers used the power in FA 2007 Sch 24 and...