20946
CIVIL EVASION PENALTY – missing Z readings and finding of fact that the Appellants lied about the opening hours – appeal dismissed
LONDON TRIBUNAL CENTRE
AGRON HAXHIJA AND BUJAR MUSTAPHA
T/A ORSI DELI FOODS Appellants
- and -
THE COMMISSIONERS FOR HER MAJESTY'S
REVENUE AND CUSTOMS Respondents
Tribunal: DR JOHN F AVERY JONES CBE (Chairman)
ELIZABETH MACLEOD CIPM
Sitting in public in London on 26 January 2009
The Appellants did not appear and were not represented
Sarabjit Singh, counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs, for the Respondents
© CROWN COPYRIGHT 2009
DECISION
(1) The Appellants carry on business at a shop adjacent to Paddington Station.
(2) The Appellants provided daily gross takings and Z readings for the period 9 March 2002 to 8 April 2002, these being the only records available to HMRC. The Z readings consistently jumped three numbers (for example declared readings being Nos 274 and then 277) suggesting that only one Z reading had been declared. The not re-settable grand total figure, which was at the bottom of each reading, was also inconsistent with the declared daily takings. Officer Prendergast calculated from the grand total Z readings that the total sales were £24,353.20 of which £9,996.50 had been declared, being a suppression rate of 58.95 per cent.
(3) On 14 August 2002 at an interview at which they were represented by accountants the Appellants admitted that transactions had not been recorded in the books, that the books required to be kept for VAT purposes were not correct and complete, and the VAT returns were not correct and complete, but that they were not aware of this at the time the returns were submitted. Their accountants estimated the underdeclaration to be £27,142 and the VAT £11,755.51 by assuming a mark-up of 75 per cent and that 10 per cent of purchases related to zero-rated sales, without justifying either figure. The defence put forward by the Appellants is that any underdeclaration was caused by staff theft and that the shop could hold stock of only £5,000 and so could not have made the sales contended by HMRC.
(4) Officer Prendergast was told on 9 April 2002 that the opening hours of the shop were 7am to 11pm and this was repeated at the interview on 14 August 2002. A canopy over the shop said "open 24 hours." Mr Prendergast was told on 23 April 2002 by Mr Mustapha's brother that Mr Mustapha the Appellant had just completed the night shift. The brother was told that Z readings were taken at 7am, 3pm, and 11pm. Another officer, Mr Manley was told on 20 May that the shop was open 24 hours and he and officer Ramdial saw that it was open at 1.30am on 5 September 2002. The Appellants say that it was originally open 24 hours a day but it had changed to the opening times mentioned. We do not accept this and find that it was open 24 hours a day.
JOHN F. AVERY JONES
CHAIRMAN
RELEASE DATE: 30 January 2009
LON/04/277