TC09555 - [2025] UKFTT 00748 (TC)

Fecha: 09-May-2025

Findings of fact

Findings of fact

38.

On the evidence before us we make the following findings of fact:

(1)

There is a significant and material difference between the information stored in the till data for the period 26 August 2017 – 14 November 2017 and the sums declared by 3KH in periods 10/17 and 01/18 (the periods covered by that data) which indicates that cash sales were suppressed in that period.

(2)

Given the process by reference to which orders were said to have been taken and bills presented to customers, which accorded with the officers’ observations, it is reasonable to conclude that the individual food and drinks items sold were accurately recorded on the till and stored in the till’s internal ledger.

(3)

Similarly, and on the basis that credit card sales were, within the tolerance to be expected of normal human error, correctly recorded within the stored till information, it is reasonable to conclude that the cash takings recorded in that stored information was accurate.

(4)

There was no evidence of a 2-for-1 offer and we conclude that no such offer was made at any relevant time by 3KH. The evidence given by MJ and MB in this regard is rejected in its entirety and we note that we consider that MJ and MB actively sought to mislead the Tribunal on at least this issue.

(5)

We also reject the contention that the banqueting offering changed materially in July 2017. We do so for the following reasons:

(a)

From at least January 2016 3KH sought to advertise the facility at TSM including a customer’s ability to “choose from our extensive menu what you would like to eat on your big day.” And that 3KH “use[d] the finest, prime quality ingredient, in all our dishes”. We consider it impossible to interpret that invitation as one that involved the provision of third-party catering. This is so particularly when contrasted with the language in the same advertisement post regarding arranging flowers, entertainment etc. It is also consistent with the reviews which certainly imply that the food at weddings was supplied by 3KH.

(b)

Officer Beard analysed the declared sales and in the earlier period with a view to establishing situations in which a “dry hire” charge consistent with that asserted to have been charged by 3KH could be identified but on the basis of the average daily cash takings recorded on the z readings. He concluded that the hire, in whatever form, had not been declared

(c)

By reference to the marketing material provided we accept that in the summer of 2017 and through to January 2018 3KH may have offered functions at half price. However, the effect of running a half price offer in the period is likely to understate the suppression for other periods.

(6)

In our view, the evidence conclusively demonstrates that in the period covered by the stored till data sales were suppressed.

(7)

As regards the other periods covered by the VAT Assessment and Further VAT Assessments we find:

(a)

The evidence of the covert all day observations on 7 November 2015 support a conclusion that there was suppression at that time. The cash declared as taken on that day was £728.08. The cash paid by the officers totalled £313.60. The officers observed a further 3 customer groups paying cash and there was a wedding in the upper room. It is inconceivable that only £728.08 cash was taken on that occasion.

(b)

It is reasonable to conclude that cash sales were suppressed during 2013. The stored table information shown on the z readings up to 24 December 2013 includes the running total of sales recorded into the till through the day exceeded the declared sales.

(c)

Whilst no till journals were available for periods 04/18 and 07/18 it is reasonable to conclude that the disparity identified between cash sales recorded on the till and declared sales continued given the consistency of sales in those two later periods as compared to 10/17 and 01/18.

39.

We therefore conclude that there is evidence of suppression of takings throughout the periods assessed.

TSL Issue

40.

As with the TSM Suppression Issue this is a factual issue, and we therefore adopt the same approach.