- The FTT allowed an appeal against personal liability notices assessing alleged over-claimed input VAT and associated penalties for deliberate behaviour.
- HMRC believed that the company had deliberately claimed input VAT on motorbikes bought for private purposes and double-glazing work performed at a private residence.
- The FTT accepted Mr Toye’s oral evidence that the motorbikes had been bought for business purposes and that the double-glazing work had been provided to rectify damage caused at a customer’s residence.
- The FTT found Mr Toye a credible witness and accepted that he had not previously provided these explanations as he was “a tradesman who is more comfortable speaking to customers and potential customers to generate work, (and then carrying it out) than with paperwork.”
- HMRC had alleged dishonesty on the evidence of a disgruntled family member who had since left the company and correspondence between Mr Toye and his accountant over the timing of VAT accounting in respect of a van.
- The FTT agreed there had been dishonesty in respect of the van, but this was not sufficient evidence to supplant the credibility of his evidence in respect of the matter at hand.
- HMRC had not raised any assessment or penalty in respect of the van nor the failure to account for output VAT on the appropriation of the motorbike so this had no bearing on the appeal.
- The evidence of the family member had been called into doubt.
Source: claritaxnews.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
