Penalty issued to liquidated trading company

The taxpayer was the sole director and shareholder of Maloney Diner Ltd which traded as a restaurant mainly providing meals and drinks on its premises. There were some zero-rated sales of take-away sandwiches.

HMRC carried out a compliance visit in 2019 making extensive checks on the till functions and Z-readings. Two officers also conducted invigilation exercises on two successive days in March 2012. HMRC issued the company an assessment for underpaid output tax for the period between 2015 and 2019 as well as a penalty notice on the basis that the inaccuracies were attributed to the deliberate and concealed behaviour of the director. The penalty was later reduced but was wholly charged to the taxpayer when a personal liability notice (PLN) was issued in November 2019. A separate notice was issued for corporation tax purposes.

The First-tier Tribunal agreed that HMRC had proved that output tax had been...