BJ Shere Khan Star City Ltd & Anor v Revenue and Customs (Suppression of profits - best judgment) [2024] UKFTT 639 (TC) (18 July 2024)

BJ Shere Khan Star City Ltd & Anor v Revenue and Customs (Suppression of profits - best judgment) [2024] UKFTT 639 (TC) (18 July 2024)

The Tribunal found HMRC's evidence insufficient to establish that BJSKSCL traded as Oodles N'Oodles and that suppression of profits occurred at Shere Khan. The VAT and CT assessments relating to suppressed profits and Oodles N'Oodles were not made to best judgment and must be reduced. Input tax and zero rating claims were not substantiated by reliable evidence, so HMRC's assessment on these points stands. Penalties and personal liability notices based on suppressed profits and Oodles N'Oodles trading are invalid.

Citation
[2024] UKFTT 639
Parties
First Appellant: B J Shere Khan Star City Limited; Second Appellant: Mr. Babar Saddiq; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
18 July 2024
Procedural Posture
Tax Appeal / Final Judgment
Outcome
Appeal allowed in part; VAT and CT assessments reduced; penalties and personal liability notices relating to suppressed profits and Oodles N'Oodles trading set aside; input tax and zero rating assessments upheld.
Legal Topics
VAT Assessment, Corporation Tax, Penalties, Personal Liability Notice, Best Judgment, Discovery Assessment
Tax Law Administrative Law VAT Assessment Corporation Tax Penalties Personal Liability Notice Best Judgment Discovery Assessment

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Parties

B J Shere Khan Star City Limited

First Appellant

Mr. Babar Saddiq

Second Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / Final Judgment

Legal Issues

  1. 1 Whether BJSKSCL traded as Oodles N'Oodles
  2. 2 Whether there was suppression of profits at Shere Khan
  3. 3 Whether VAT and CT assessments were made to best judgment

Ratio Decidendi

The Tribunal found HMRC's evidence insufficient to establish that BJSKSCL traded as Oodles N'Oodles and that suppression of profits occurred at Shere Khan. The VAT and CT assessments relating to suppressed profits and Oodles N'Oodles were not made to best judgment and must be reduced. Input tax and zero rating claims were not substantiated by reliable evidence, so HMRC's assessment on these points stands. Penalties and personal liability notices based on suppressed profits and Oodles N'Oodles trading are invalid.

Court Disposition

Appeal allowed in part; VAT and CT assessments reduced; penalties and personal liability notices relating to suppressed profits and Oodles N'Oodles trading set aside; input tax and zero rating assessments upheld.

Orders

  • VAT and CT assessments to be recalculated excluding suppressed profits and Oodles N'Oodles sales.
  • Penalties and personal liability notices relating to suppressed profits and Oodles N'Oodles trading are discharged.