A deduction for purchases in respect of a fish and chip shop was overstated and the discrepancy did not arise due to employee theft or fraudulent activity.

The appellant operated a fish and chip takeaway shop during the tax year 2015/16. Her husband ran a post office and convenience store, which was located next door to her fish and chip shop. 

The appellant paid her suppliers in cash. The suppliers would bring the supplies to the shop and would be paid either by her or her employees. The cash was paid out of the till in the fish and chip shop, but if there was insufficient cash in the till, either she or an employee would take the supplier’s invoice next door to the convenience store, be given cash from the till in the convenience store, take the cash back to the fish and chip shop to pay the supplier, and give the receipted invoice to the person operating the till in the convenience store.

The appellant’s self-assessment