Mr Michael Hurst and Mrs Mary Hurst v Her Majesty's Revenue & Customs

Facts

Mr Michael Hurst and Mrs Mary Hurst traded in partnership as "Park Fisheries", carrying on business as proprietors of three fish and chip restaurants and takeaways — Park Fisheries in Cleckheaton, Mother Hubbards in Oldham and Olivers at Low Moor, Bradford — submitting a single VAT return for all three. HM Revenue and Customs formed the view that the returns did not reflect the true level of takings. Their concern arose from the appellants' failure to keep till rolls and records of daily gross takings, despite letters in February 1993 and October 1997 warning that such records must be retained, and from inconsistencies between the declared takings and the turnover figures appearing in sales brochures prepared by Ernest Wilson & Co Limited, management accounts supplied to Barclays Bank, and weekly takings figures given to Mr Oller, the purchaser of Olivers. Following unannounced visits to the three premises on 6 February 1998, Mrs Jones, the assessing officer, calculated a suppression rate of 118 per cent, applying reduced stepped rates of 92 and 66 per cent to the final two periods and allowing four per cent for zero-rating. Amended assessments notified on 20 July 2001 were reduced on review to £149,764 plus interest for the periods 03/96 to 12/97, the earlier periods being withdrawn as time-barred. The appellants appealed.