In Brough East Yorkshire Limited v HMRC [2021] TC08213, a Chinese takeaway successfully appealed a £34k VAT assessment. HMRC's one-night invigilation of the food outlet failed to note suppression of cash and the methodology in making the assessments was flawed by poor sampling and failure to adjust for price changes.

The grounds for appeal, broadly, were that there was no reliable evidence of suppression of cash and that HMRC’s methodology was flawed. 

The Tribunal found: 

Finding that one night’s Invigilation is not representative of the previous VAT periods and simply, that the evidence of suppression before the Tribunal was inadequate. The FTT was not satisfied that suppression had, in fact, taken place. The FTT concluded that the Assessment was unreasonable, inasmuch as it overestimates the amount of under-declared output tax, and also as a result of the failure to consider matters which were clearly brought to HMRC’s attention.

The appeal was allowed.


It seems careless to base a six-year tax assessment on the results of a single visit, however, a lack of a functional till and daily takings 'z' totals are bound to make HMRC suspicious. It did not assist the taxpayer in defending their position during the enquiry. Under Making Tax Digital for VAT, HMRC expect to find a digital link between gross takings records and bookkeeping records.

Useful guides on this topic

Assessments: Best judgement
What is a 'best judgement' assessment for VAT? When can HMRC raise one? What are your rights of appeal? How do you displace a best judgement assessment?

How to appeal an HMRC decision
Disagree with a HMRC decision? How to appeal, what type of decision can you appeal and what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External links

Brough East Yorkshire Limited v HMRC [2021] TC08213

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