Dyanne Cheung v Commissioners of Customs and Excise

Facts

Mrs Dyanne Cheung was a director of West West Ltd, which traded as Mr Au Restaurant, a buffet-style Chinese restaurant just off Leicester Square in central London. The company registered for VAT from 26 August 1998 and opened after refurbishment on 9 October 1998; it later went into liquidation. Mr Y K Hou, the other director, had put in £100,000 of the £350,000 outlay and collected and banked the cash, while the Appellant worked at the restaurant, prepared the weekly sales summaries sent to the accountant and checked the previous night's takings. Following a visit by Jonathan Heath on 5 January 1999 to check a repayment claim, the Commissioners were dissatisfied with the credibility of the declared figures and mounted observations and test purchases on 13 March and 20 April 1999 and on 8 and 11 March 2000. Officers received numbered bills, but the bills in the company's records bore no numbers and several test meals did not appear in the daily add-lists. Mrs Carolyn Sprigg concluded that 30 per cent of takings had been suppressed, assessed the company for eight accounting periods to 31 July 2000, and the resulting evasion penalty of £73,290 was apportioned in its entirety to the Appellant under section 61 of the VAT Act 1994, with 5 per cent mitigation for co-operation. The liquidator did not pursue the company's appeal against the assessment; the Appellant appealed the penalty.