Bustard v Revenue & Customs (VAT - ASSESSMENTS : Best judgment) [2015] UKFTT 546 (TC) (23 October 2015

Bustard v Revenue & Customs (VAT - ASSESSMENTS : Best judgment) [2015] UKFTT 546 (TC) (23 October 2015

The Tribunal found that HMRC's assessments were not made to best judgment because their methodology relied on an unrepresentative period, failed to account for all relevant allowances and business practices, and did not adequately consider the Appellant's detailed sales restatement exercise based on primary records....

Source-derived case information.

Citation
[2015] UKFTT 546 (TC)
Parties
Appellant: Ernest O Bustard; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Procedural Posture
Tax Appeal (vat and Income Tax Assessments and Penalties) / First Tier Tribunal (tax Chamber) Substantive Hearing and Decision
Outcome
Appeal allowed
Legal Topics
VAT Assessments, Income Tax Assessments, Best Judgment Assessment, Business Economics Exercise, Gross Profit Ratio, Penalties for Deliberate/inaccurate Returns, Record Keeping Requirements
Tax Law VAT Assessments Income Tax Assessments Best Judgment Assessment Business Economics Exercise Gross Profit Ratio Penalties for Deliberate/inaccurate Returns Record Keeping Requirements

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Summary, issues, holding and outcome

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Parties

Ernest O Bustard

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Tax Appeal (vat and Income Tax Assessments and Penalties) / First Tier Tribunal (tax Chamber) Substantive Hearing and Decision

Legal Issues

  1. 1 Whether HMRC's VAT and income tax assessments were made to best judgment under the relevant statutory provisions
  2. 2 Whether the Appellant under-declared turnover and profits
  3. 3 Whether HMRC's methodology (business economics exercise and mark-up of purchases) was appropriate and accurate

Ratio Decidendi

The Tribunal found that HMRC's assessments were not made to best judgment because their methodology relied on an unrepresentative period, failed to account for all relevant allowances and business practices, and did not adequately consider the Appellant's detailed sales restatement exercise based on primary records. The Appellant's evidence was more comprehensive and credible, and there was insufficient evidence of deliberate concealment or significant under-declaration of sales. Accordingly, the assessments and penalties were not upheld.

Court Disposition

Appeal allowed

Orders

  • HMRC's VAT and income tax assessments set aside
  • Associated penalties cancelled