A special commissioner upheld jeopardy assessments raised following an enquiry into the taxpayer's business since the taxpayer had failed to appear at the hearing to show that the revised figures were wrong.

Facts

The taxpayer traded as Bangkok Thai Restaurant. The Revenue had carried out observations on the restaurant and made test purchases. On a subsequent examination of the records none of the test purchases were in the records. A Revenue officer made an analysis of the records and, using a business economics model, calculated the expected takings. She calculated from the records the food to drink ratio for three months (June 2002, September 2002 and March 2003) to show that drinks (excluding tea and coffee) amounted to 24.59 per cent of the takings. From the drinks purchases she calculated the sales price of the drinks. From that the expected sales were calculated at £151,952.26, compared to the declared sales of £131,936. She met with the taxpayer and his advisers on 30 September 2005 and gave them the calculations. They did not make any comment but asked for an appeal hearing.

The taxpayer appealed against the jeopardy amendments to his self-assessments for 2002–03 and 2003–04 and closure notices issued for the two years. Subsequent communications to the taxpayer from the Revenue had been returned in the post. His previous adviser did not know where he was. A Revenue officer had visited the restaurant and been told by the new owner that the taxpayer had returned to Thailand in June 2007 and that he did not have an address for him. In the circumstances the special commissioner made a direction under reg. 28 of the Special Commissioners (Jurisdiction and Procedure) Regulations 1994 dispensing with the requirement to serve documents relating to the appeal on him.

Issue

Whether the taxpayer had shown that the revised figures were incorrect.

Decision

The special commissioner (Dr John Avery Jones) (dismissing the appeal) said that the figures seemed to have been carefully calculated and had been put to the taxpayer. They had been revised twice by the Revenue as a result of checking. The burden of proof was on the taxpayer to displace them and he had done nothing to do so. Accordingly the appeals were determined in the following figures: 2002–03 appeals against jeopardy amendment and closure notice: tax £8,905.20; 2003–04 appeals against jeopardy amendment and closure notice: tax £5,828.70.

(2008) Sp C 691.
Decision released 17 June 2008.