Registration of food takeaway businesses

Withington KFC Services Ltd (WKS) traded as a fast-food takeaway business between 2013 and 2016. The business was then transferred as a going concern to NNS Services Ltd (NNS). Neither business was registered for VAT on the basis that the directors claimed the takings were below the registration threshold.

HMRC made an unannounced visit in August 2016. Further work carried out by the officers included six test purchases made under cover an invigilation exercise covering two full days of trading in May 2017 and an analysis of chicken purchases to identify seasonal variations linked to student sales.

As a result HMRC concluded both companies should have registered for VAT. It raised assessments using its powers of ‘best judgment’ (VATA 1994 s 73(1)). These were necessary because the companies did not submit returns. Personal liability notices were also issued against two directors but these were not the subject...