TC09555 - [2025] UKFTT 00748 (TC)

The stated reason for permitting 10% reduction in respect of the two relevant inaccuracies is as follows:

By reference to correspondence available to us, HMRC notified the Appellant that it proposed to undertake unannounced visits in the period 19 – 21 July 2017. The visit was made on 20 July 2017 as the restaurant was closing. Officer Beard told us that he was refused entry. His notebook of the visit records that he identified himself to a waiter and asked to speak with the person in charge. It then records that he was approached by someone who Officer Beard described as a manager. Officer Beard explained the purpose of the visit and was told that the manager would need to contact head office. A call was made, and Officer Beard was invited to speak with a Mr Khan on the telephone who said he was company secretary (this was not legally correct). Mr Khan told Officer Beard his was acting outside his authority in attending outside business hours. It was indicated that HMRC could attend unannounced, but it would need to be in business hours and Officer Beard was asked to leave. Officer Beard followed the instruction.

HMRC then sought to make an arranged visit on 21 August 2017. TSM indicated it was inconvenient with MJ emailing HMRC to seek to rearrange because of absence of the bookkeeper and the accountant. Despite this HMRC notified they intended to make an unannounced visit between 22 and 24 August 2017 and visited on 23 August 2017. Officer Beard again informed us, as corroborated by his notebook, that he spoke with Mr Khan on the telephone. He advised that he wished to take data from the till onto a USB stick. Mr Khan understood that a meeting had been arranged for 21 September 2017 and did not therefore understand the purpose of Officer Beard’s attendance on 23 August 2017. Officer Beard’s notebook shows that he explained that he wanted to uplift till data. In response Mr Khan again alleged that HMRC were acting outside their powers and asked Officer Beard to leave. Officer Beard left without the till data he had attended to acquire.

MJ sought to postpone the meeting which had been arranged for 21 and 22 September 2017 but eventually conceded to the visit taking place indicating that the “paperwork for the last four to five weeks was at the registered office” and the accountant would be available.

Officer Beard explained that a visit took place on 21 and 22 September 2017 however, at the visit 3KH were unable or unwilling to access the till data only providing z-readings. On 3 October 2017 HMRC wrote to 3KH regarding what are described as outstanding matters, in particular a request to review documentation from 2013 to October 2017. The meeting was proposed for 6 November 2017. HMRC also noted that between the unannounced visit on 23 August 2017 and the announced visit on 21 September 2017 the till had been changed. Details of the change and associated documentation were requested.

On 14 November 2017 HMRC were finally provided with access to the till from which they were able to extract data for the period 26 August to 14 November 2017.

Further correspondence ensued and on 16 January 2018 HMRC proposed a visit to TSM (and other restaurants with whom MJ was involved) on 12 February 2018 explicitly to interrogate further data stored on the till with further visits to 3KH’s accountants to review documentation on 14 – 16 February 2018. At that visit HMRC attempted to access the programming section of the till but a manager’s log in was required but Mr Khan, who managed the visit on behalf of 3KH, did not have the relevant log in. The meeting was aborted.

A further visit took place on 28 February 2018. Although Mr Khan (who again managed the visit for 3KH) had a log in code it would not permit access to the reports section of the till. Default logins were tried but none permitted access. The additional till information was, as we understand it, never obtained.