Source: Tribunal | 15-08-2012
The Upper Tribunal recently heard an appeal against a decision of the First Tier Tribunal which rejected a taxpayer's appeal that HMRC had not issued a VAT assessment on time. The taxpayer ran a takeaway food business firstly as a sole trader and then as sole director of a company. HMRC visited the premises in 2008 and reached the conclusion that the taxpayer's takings had been underdeclared. HMRC concluded that the taxpayer was liable to be registered for VAT since 1 December 2002 as a sole trader and from 1 December 2005 when the business was transferred to a company.
The taxpayer argued that the assessments were invalid as they were made outside the relevant time limits. However, the First Tier Tribunal upheld the assessment on the basis that the normal time limit for issuing an assessment was overridden by the fact that HMRC were only put in possession of the evidence of facts sufficient in their opinion to justify the making of an assessment in February 2008.
The taxpayer appealed the decision but the Upper Tribunal held that the assessment had been properly issued within the statutory time limit and that there were no grounds for appeal. HMRC’s VAT assessments for VAT of £41,400 for the period 1 December 2002 to 30 November 2005 and for £10,200 for the period 1 December 2005 to 30 September 2008 and five further quarterly accounting periods was upheld.