A Blackpool owner of an off licence has been banned from acting as a director after using fake returns to avoid VAT over a three-year period
Stuart Kane was the director of Booze Booze Booze Limited, which traded as News and Booze. From September 2013 to June 2016 he failed to submit accurate VAT returns to HMRC. Over the period he reported VAT liabilities totalling £14,435. In the same period, Kane submitted VAT returns to HMRC which reported VAT reclaims totalling £21,713.
In December 2015 HMRC began an investigation into the company’s VAT reclaims discovering that the company under-declared its sales and VAT liabilities in two ways. Between July 2013 and December 2015, the company produced two Z-reports from the till each day, the first of which was used to declare sales and calculate VAT liabilities, and the second recorded sales which were not declared.
On 15 September 2016 HMRC officers seized a cashbook from the trading premises of the company. The cashbook recorded ‘day’ and ‘night’ sales. The ‘day’ sales corresponded with the declared Z-reports. The ‘night’ sales corresponded with the undeclared Z-reports, effectively creating a dual report on sales to disguise earnings.
Following the commencement of HMRC’s investigation, between December 2015 and September 2016 Booze Booze Booze produced a single daily Z-report, and the ‘refund’ function of the businesses till was used to remove sales from the daily Z-report.
In a letter dated 27 June 2017, HMRC raised assessments for the company’s undeclared VAT liabilities totalling £89,326 for all quarters ending September 2013 to June 2016 inclusive.
HMRC revised the company’s profits in line with the undeclared sales; consequently, HMRC raised assessments for corporation tax liabilities for the years ending 31 March 2014, 2015 and 2016, totalling £102,125.
HMRC submitted a final claim in the liquidation of the company for £254,895, of which £102,125 is claimed in respect of unpaid corporation tax, £91,736 in respect of unpaid VAT, including surcharges and interest, and £51,062 of penalties.
The entirety of HMRC’s claim remains unpaid.
Kane has been banned from being a director for eight years until June 2029.
