Soka Blackmore Ltd v Revenue & Customs [2010] UKFTT 161 (TC) (13 April 2010)

Soka Blackmore Ltd v Revenue & Customs [2010] UKFTT 161 (TC) (13 April 2010)

The Tribunal found that the appellant failed to provide credible evidence for the sources of unexplained deposits and suppressed takings from the business were more likely than not paid into the director's account. The Tribunal preferred bank evidence over Z-readings and determined suppressed takings at £22,800, leading to a revised profit figure. The company was found at least negligent in record-keeping, justifying a penalty.

Citation
[2010] UKFTT 161 (TC)
Parties
Appellant: Soka Blackmore Ltd; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
13 April 2010
Procedural Posture
Corporation Tax Appeal / First Tier Tribunal Decision
Outcome
Appeal partially allowed; assessment reduced; penalty imposed.
Legal Topics
Assessment, Self Assessment, Penalties, Under Declared Profits
Tax Law Corporation Tax Assessment Self Assessment Penalties Under Declared Profits

Case Brief

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Parties

Soka Blackmore Ltd

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Corporation Tax Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether profits were under-declared
  2. 2 Whether liability to penalty exists
  3. 3 Whether HMRC's amendment to the tax return was correct

Ratio Decidendi

The Tribunal found that the appellant failed to provide credible evidence for the sources of unexplained deposits and suppressed takings from the business were more likely than not paid into the director's account. The Tribunal preferred bank evidence over Z-readings and determined suppressed takings at £22,800, leading to a revised profit figure. The company was found at least negligent in record-keeping, justifying a penalty.

Court Disposition

Appeal partially allowed; assessment reduced; penalty imposed.

Orders

  • Profits restated to £37,336 for the accounting period ended 31 July 2004.
  • HMRC to calculate extra tax due on revised profits.