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TMI Blog2003 (7) TMI 681X X X X Extracts X X X X X X X X Extracts X X X X ..... ctober 1995. The Respondents subsequently re-registered the Appellant on 18 December 1997 with effect from 24 October 1995. The facts and evidence 5. The Respondents produced a bundle of documents including photographs of the Appellant's premises. In addition the Tribunal heard oral evidence from Kenneth Norman Clark, senior officer of HM Customs and Excise and Jackie Gray, officer of HM Customs and Excise. 6. Following the Appellant's application to deregister, the Respondents undertook a test purchase on 24 October 1996 and ascertained that the shop's opening hours were 1200-1400 hours and 1600-2200 hours Monday to Saturday. Two staff were working on that occasion and a till was in use. 7. Mr Clark obtained the sales records of fish from the wholesaler Atlantic Fish Wholesale Ltd who had supplied fish to the Appellant during the period 1/11/95 to 31/10/96. Similarly sales records of chicken to the Appellant from the wholesaler Brook Farm Produce from the period 31/10/95 to 13/5/97 were obtained and analysed. 8. Mr Clark, apparently by coincidence, discovered that the Appellant's shop was advertised for sale with a local agent and the takings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t two weeks in August in 1996. It was however acknowledged by K M accountants in their report that there was a period of five weeks from 3 October 1996 to 15 November 1996 when there had been no purchases of potatoes and with regard to this the accountants stated as follows: it will be difficult to explain how a fish and chip shop can operate without buying potatoes for five weeks. Therefore, we suggest to admit that invoices for the purchase of potatoes, during those five weeks, have been lost or misplaced. 14. In order to verify the accuracy of the self-invigilation which the Appellant had carried out, Mr Clark arranged to have test purchases undertaken over a period of a week. A total of three such purchases were made on 29 May 1997, 5 June 1997 and 6 June 1997. In addition to the purchases made by the officers, purchases by other customers were observed. Mr Clark in his witness statement recorded that of twelve purchases which were observed, three did not appear in the self-invigilation records. 15. The invigilation was carried out by the Commissioners on 19 September 1997 which showed takings of 339.75. The lunch time takings, as stated by the Appellant for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit of the doubt. This schedule showed the total of declared purchases as being 1,348.10 and the undeclared purchases as 1,126.76, giving a figure of 83.58% of undeclared to declared purchases. 3. The analysis of declared purchases which showed the gaps previously referred to in the purchase of fish and potatoes, inter alia. 18. By a letter dated 20 November 1997 the Appellant's solicitors wrote to Mr Clark complaining about the conduct of the officers in carrying out the invigilation and of veiled threats to the Appellant as to what would happen should he not re-register for VAT. There was also a specific complaint against Mr Clark during his visit of 18 November in which it was stated that Mr Clark became rude and aggressive and told the Appellant that he had no intention of corresponding with the writer of the letter whom Mr Clark knew was acting for the Appellant. There was a complaint about the manner in which the observation was carried out from outside the premises, including a complaint that Mr Clark and Miss Gray laughed hysterically, and stared at the Appellant and his customers in such a way as to make the Appellant feel threatened. This caused the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchasing records. 23. The schedules listed above were included with that letter. 24. A further series of correspondence followed between the Respondents and the Appellant's solicitors. On 3 March 1998 Mr Clark raised an assessment for value added tax in the sum of 25,818 based upon best judgment. In his letter informing the Appellant of this assessment he attached a schedule showing that the assessment was based on an average suppression of 85.39%, being the combined average of the suppressed fish and chicken purchases for the period 25/10/95 to 31/1/98. Mr Clark took the declared takings for the period 25/10/95 to 7/6/97, the declared average weekly turnover and applied a suppression rate of 85.39% to the estimated declared total turnover for a 34-week period of 31,990 combined with the actual declared takings of 75,197.50. 7/47th of the total amount of 198,713 amounted to 29,595 from which he deducted an input tax allowance of 12.76% which was based upon previous declarations, and this gave an assessment of 25,818. 25. Further correspondence followed, culminating in the sending by the solicitors of the report by K M Accountants on 27 July 1998. 26. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not above the registration threshold. 29. Mr Clark invited the solicitors to provide the full names and addresses of the family, relatives and tenants allegedly receiving 50% of the purchases made to the business in order that they may be interviewed. He also asked for sight of all purchase invoices and takings records for the period 1/4/95 to 30/7/98. The solicitors responded with a letter dated 17 November 1998 giving the names of three people who could be contacted through the solicitors and who were willing to be interviewed. No interviews took place with these people. Mr Clark told the Tribunal this was because the solicitors stopped acting for the Appellant shortly after 17 November 1998. In fact the solicitors were still acting for the Appellant up until 1 February 2000. 30. At no point did the Appellant submit a return for the relevant accounting period. The Respondents confirmed the decision to re-register the Appellant and, by a letter of 4 February 1999, informed him that a review of the assessment for the 01/98 period was not necessary as no appeal would be available to the Appellant until he had rendered a return for the period. By that letter he informed the so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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