Mrs Sau Kwan Huan v Commissioners for Her Majesty's Revenue and Customs

Facts

The applicant, Mrs Sau Kwan Huan, carried on a takeaway food business. On 2 March 2010 the Commissioners for Her Majesty's Revenue and Customs opened an enquiry into her self-assessment income tax return for the tax year 2008-09 under section 9A of the Taxes Management Act 1970. The enquiry formed part of a wider investigation being conducted simultaneously across income tax, VAT and employer compliance over a period extending across several years. HMRC's VAT compliance colleagues had investigated takeaway meal sales and, following test purchases carried out in October 2009, suspected a significant understatement of sales, which in turn caused the officer leading the income tax enquiry, Mrs Christine Daniells, to be concerned about unreported sales in the business accounts. At a meeting on 21 June 2010 attended by Mrs Huan and her then agent, Mrs Huan stated that the business had been run on the same basis since approximately 2000, and sources of capital amounting to £10,000 were unexplained. Mrs Huan accepted that some takings had not been recorded, but the appropriate adjustment to the accounts remained in dispute, and HMRC's requests for further information (reissued in shortened form on 11 July 2011) remained unanswered. On 18 April 2011 Mrs Huan applied to the Tribunal for a direction requiring HMRC to issue a closure notice under section 28A of the Taxes Management Act 1970.