B J Shere Khan Star City Limited & Anor v The Commissioners for HMRC
Decision date: 16 May 2025
Neutral citation: [2025] UKFTT 543 (TC)
Overall AI summary confidence: high
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: high
This appeal concerned large VAT and corporation tax assessments and penalties issued to B J Shere Khan Star City Ltd (BJSKSCL) and related personal liability notices to its director, arising from HMRC’s view that the company also operated the Oodles takeaway and had suppressed sales and improperly claimed input tax/zero‑rating. The Tribunal found the evidence did not establish that BJSKSCL traded as Oodles and rejected suppression, allowed limited best‑judgment adjustments on zero‑rating and some input‑tax items, held most VAT assessments time‑barred (leaving only 07/14) and most CT discovery assessments invalid except for two failure‑to‑notify periods, reduced penalties on a finding of carelessness (not deliberate) and set aside the PLNs.
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: high
From the Tribunal’s findings: (1) suspicion that a company may have carried on a trade is not enough to sustain assessments — HMRC must have material giving rise to a reasonable belief that the company (not only its director or another entity) carried on the trade; (2) a best‑judgment VAT assessment must rest on an honest attempt by the officer, representative sampling or data and arithmetically sound calculations, and where those are lacking the Tribunal may correct amounts rather than simply discharge an assessment; and (3) discovery assessments require an officer to hold a reasonably held belief, informed by the objective and subjective tests and within the statutory timing limits.
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 chaotic or incomplete record‑keeping is apt to indicate carelessness rather than deliberate behaviour for penalty purposes; that decision‑makers relying on another officer’s view should interrogate the basis for that view; and that where principles are decided but quantum remains unclear the Tribunal may invite parties to agree quantum.