TC09665 - [2025] UKFTT 01252 (TC)

Fecha: 26-Ago-2025

Alternative evidence

Alternative evidence

34.

The alternative information and documents requested by HMRC and provided by the Appellant were as follows:

(1)

Questionnaire: the Appellant completed the questionnaire sent by HMRC, including:

(a)

The Appellant in the questionnaire notified HMRC that the Appellant’s agent was Mr Naveed.

(b)

The reason given for recovering the VAT on purchases was that;

“our client built a brand new house and sold it also did some refurbishment work”

(c)

Sales were stated to be standard rated.

(2)

Bank statements: in response to HMRC’s requests to see bank statements the Appellant provided a scanned spreadsheet prepared by Mr Naveed purporting to show bank entries. HMRC considered the spreadsheet to be inadequate and requested copies of the original bank statements showing business name, account number and bank letter head. This was never provided. Ms Wilkinson said that the spreadsheet did not show that the invoices had been paid and without the bank letter head and the other information accepting this information was a revenue risk.

(3)

VAT account: the Appellant was asked for an explanation of how the figures were reached in the 09/22 Return. The Appellant provided a purchase daybook analysis of the £68.556.28 of input tax claimed but showed daily totals not individual invoices. Further it provided a day and month but not a year. HMRC could not reconcile the workings provided against the invoices provided by the Appellant. HMRC told the Appellant this was insufficient and repeated the request for a VAT account referencing HMRC’s guidance on what it should contain. This was never provided.

(4)

purchase/sale ledger: the Appellant provided a spreadsheet purchase ledger from 20 December 2021 to 4 February 2023. HMRC noted that the total VAT in the ledger is £20,709.58, much less than the VAT reclaimed in the 09/22 Return. Further, it was not possible to identify which purchases related to supplies made before or after EDR.

(5)

a stock and asset list; HMRC noted from the purchase ledger that purchases had been made before the EDR and asked for information on whether the purchases were goods or services and whether they were still held as at the EDR. Mr Naveed confirmed by e mail on 22 September 2023 that all stock had been used for the house build and renovation.

35.

Ms Wilkinson was very clear in her evidence that if there were no invoices or only defective invoices she was prepared to consider other evidence, particularly if there had been bank statements showing payments by the Appellant. However, the alternative evidence produced by Appellant did not show a sufficient link between the VAT reclaimed and purchases and payments made. Further it was not possible to identify whether the purchases related to sales made before or after EDR. There may well be recoverable VAT but HMRC was unable to identify it. The position was made worse by uncertainties about when the Appellant should have been registered by, the timing of the sales of the properties and their proper VAT treatment.