A sole trader’s cash takings had not been suppressed as contended by HM Revenue & Customs, and business income was correctly stated on his tax return.
The appellant, a sole trader operating a limousine hire business, was subject to an enquiry by HM Revenue and Customs (HMRC) into his tax return for 2011/12.
Following a review of the appellant's business records, the main issue identified by HMRC was the low ratio of cash to credit/debit card payments. HMRC also formed the view based on business mileage that “all things being equal” cash takings had been suppressed. HMRC’s overall conclusion was that the sales figures for 2011/12 and 2010/11 were significantly understated. HMRC raised assessments and sought penalties for those tax years. The appellant appealed.
The appellant's father was his son's bookkeeper. Cash was recorded by the appellant in the form of a scrap of
