Summary 

HMRC assessed Black Wolf Ltd for a penalty for submitting VAT returns for the VAT periods February 2019 to November 2021, which in their view contained inaccuracies which were due to the deliberate behaviour of the company. HMRC also thought that these inaccuracies were attributable to the behaviour of the appellant, a director of the company, and accordingly issued a penalty liability notice (PLN) that the appellant was liable to pay 100% of the penalty. The appellant contended that there were no deliberate inaccuracies and the VAT recovery had been correct. 

Background 

The appellant ran a locksmith business but due to ill health, the business ran down and he decided to cease trading and de-register for VAT. Shortly before this, HMRC commenced a compliance check on the business which was carried out by email and there were never any face-to-face meetings. During his period of ill health, his