Soka Blackmore Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 13 April 2010
Neutral citation: [2010] UKFTT 161 (TC)
Overall AI summary confidence: medium
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: medium
This appeal concerned HMRC’s amendment of Soka Blackmore Ltd’s 2003–04 corporation tax return, based on alleged suppressed over‑the‑counter sales and unexplained deposits in the director’s personal bank account, and an associated penalty for negligent delivery of an incorrect return. The Tribunal found some of HMRC’s concessions on review justified, rejected HMRC’s higher figures, fixed suppressed takings at £22,800 (reducing amended profits to £37,336) and upheld a 25% penalty after abatements. HMRC was directed to recalculate the tax effect under s50(8) TMA.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
Where a taxpayer’s records are inadequate and personal bank deposits are unexplained, a tribunal may treat unexplained deposits as evidence of suppressed trading receipts and increase assessed profits, but must make reasonable deductions and weigh available evidence (including concessions made on review); bank records can be treated as more reliable than till Z‑readings where records are incomplete.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal observed that Z‑readings are not independent proof of takings because they depend on all sales being rung in, so their weight depends on the reliability and completeness of records; and that low VAT output figures may reflect low turnover but do not by themselves distinguish between genuinely low sales and under‑declaration.