UT (Tax & Chancery) UT/2023/00099 - [2025] UKUT 00013 (TCC)

On 21 January 2019, Aspire wrote to Officer Mills as follows:

“3.

I can confirm information pertinent to the August return is available. Please provide a schedule of records you wish to see in order to check the return and process the repayment.

…

6.

I am not able to accept your point that an entry on a bank statement cannot be accepted as actual evidence of payment. In terms of "Verity", Mr Clarke explained the rationale behind the consolidation of invoices for a variety of suppliers. It is not a single payment, rather a bank file uploaded to meet multiple suppliers - for administrative convenience.

7.

For the purpose of checking the August return, I cannot see any reason why HMRC should request a full account listing for "Verity" since the commencement of the business in 2010.

8.

There are no "subsidiary companies" that make up each Verity transaction, as FSC does not have any subsidiary companies.

9.

What is meant by "a listing of all subsidiary companies made up by Verity"?

10.

It is wholly unreasonable, unwarranted and indeed provocative to threaten my client with a disallowance of its input tax deduction under these circumstances. At the present time my client is having to deal with a prolonged PAYE/NIC enquiry (started in 2011 and subject to complex tribunal proceedings). These proceedings involve significant record production in terms of expenses records - the timeframe given for production of these records is June 2019. It is envisaged that many of the staff, including Mr Clarke, will be engaged in some capacity on locating records in an off-site storage facility. I would add that FSC is also the subject of a National Minimum Wage enquiry. The director is trying to run a business. It is unlikely that the records can be produced much before July 2019. Should you require confirmation of the directions in this case, please let me know.”

Officer Mills responded on 25 January 2019; his letter included the following paragraphs:

“6.

As indicated within my letter of the 7th I would require evidence that a payment against a supply was made to the corresponding supplier. To date this has not been evidenced.

7.

This would be covered with the evidence of payment as above.

8.

And 9 [sic]. On 26th October 2018 Dave Clarke stated that Verity isn't a company but lots of individuals. I would require evidence of the invoices that make up these individuals and a full listing of them all.

10.

Whilst I note your point that there is a further case that is time consuming, these are enquiries on the VAT situation with regard to FS Commercial. You will be aware that my initial approach regarding the records for this business commenced in October 2018. That timeframe strikes me as more than reasonable.”