In Anthony Leach v HMRC [2019] TC 7180, the first tier tribunal found that a trader’s excessive claims for refunds of VAT was as a result of “deliberate and concealed” behaviour. The consequence is that HMRC can claim tax for the previous 20 years rather than four, and that the highest rates of penalty apply.
- The trader routinely destroyed all supporting paperwork immediately after filing his VAT return, saying he did not know it had to be kept for six years.
- After a VAT visit when he started to keep records, his input tax claims for the same basis were one eighth of the previous figures.
- HMRC raised assessments based on their best judgement of the loss for VAT of £49,857 and penalty of £47,364.
On appeal, the first tier tribunal found that destruction of records constitutes concealment and this was deliberate.
The assessments and penalties were upheld.
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