Suppression of sales figures

The company traded as an Indian restaurant. HMRC alleged it had deliberately suppressed its cash sales and after an enquiry raised assessments for corporation tax (£136 849) and VAT (£73 219) plus penalties. The taxpayer denied suppressing any sales.

On Saturday 10 May 2014 a team of HMRC officers made a covert visit to check the takings. They considered the figure of £2 457 was ‘significantly higher’ than other Friday and Saturday evenings declared in the business records since the company started traded in 2008. HMRC used the mix of 55/45 between card and cash sales to raise their assessments based on best judgment (VATA 1994 s 73(1)). This compared with the 90/10 ratio declared by the taxpayer in the year to 30 June 2014 from which HMRC concluded the business had suppressed its cash takings.

There were several other indicators of suppression but the...