Hardly a week seems to go by without an email plopping into my in box from HMRC about catching some tax dodging miscreant or other and specifying huge amounts of tax being claimed as a result.
I marvel at the number of times a Fish and Chip shop features and the massive amounts that are always highlighted.
Take for instance the latest fish and chip shop that has been caught out under-declaring their takings and thus their Vat and in this case the additional output vat charged was £168,000 (including interest and penalties) but here’s the rub, the vat due will be based on omitted gross takings as there would be hardly any input vat to offset in a fish and chip shop so with corporation tax at approx. the same rate namely 20% how come the apparent Corporation Tax added is more?
The omitted takings would have to have the additional output vat deducted thus taxing the correct net sale yet in this case the additional Corporation Tax assessed was £210,000 before penalties.
How much credence can we place on the amounts that HMRC are trumpeting? No doubt the taxpayer was under-declaring but how accurate are these Assessments? Does the quantum of the assessment matter to the miscreant taxpayer if like the case in point they go into liquidation so they aren’t arguing an excessive assessment? Do HMRC just want a high liability that they can push out irrespective of the fact that they aren’t going to collect hardy any of it?
Finally, does it always seem to be a fish and chip shop?
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