Mr Singh & Mrs Kaur t/a "Superdish" v Her Majesty's Revenue & Customs

Facts

Mr Singh and Mrs Kaur traded in partnership as "Superdish", a fish and chip take-away and restaurant in Broadstairs, Kent, which they had acquired in 1999. HMRC's investigation began with an unannounced visit by Mrs Julie Barnes and another officer on 4 October 2001, when the till roll was removed because the recorded takings were roughly double the turnover regularly declared in the partnership's VAT returns. The partners admitted at that visit that they had been suppressing turnover, explaining that the vendor had told them he declared only £800 to £900 of a weekly turnover of about £2,000, and that they had done likewise. All earlier till rolls had been destroyed, so Mrs Barnes derived a suppression ratio of approximately 59% by comparing the seized till roll with the declared turnover for the equivalent weeks of the previous year uplifted by assumed growth of 13%. Those first assessments were compromised immediately before an earlier tribunal hearing at a suppression ratio of 53% and a payment of £15,000. Observations by four officers on 10 October 2003 led Mrs Barnes to conclude that turnover was again being under-recorded, and she made further assessments of approximately £21,000 for the periods 11/01 to 02/04, with a misdeclaration penalty. The partners appealed.