Randbee Leisure Ltd v Commissioners for Her Majesty's Revenue and Customs
Decision date: 11 August 2010
Neutral citation: [2010] UKFTT 375 (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 a s.73 VATA 1994 assessment by HMRC of c. £13,508 for VAT periods Oct 2003–Mar 2006, based on a mark‑up exercise using supplier invoices and price information obtained on inspection. The appellant, a wine bar company, challenged HMRC’s choice of price basis and sought to rely on later-supplied lower historical price lists and asserted losses, but provided no contemporaneous records to substantiate those figures. The First-tier Tribunal found HMRC’s assumptions reasonable given the inconsistent and incomplete records, accepted the assessment and dismissed the appeal.
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 returns and contemporaneous records are incomplete or inconsistent, Commissioners may make a best‑judgment assessment using available invoices and mark‑up techniques; such an assessment will stand unless the taxpayer produces reasonable contemporaneous records or information sufficient to displace HMRC’s calculations.
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 mark‑up exercises are a legitimate tool in audits of businesses with substantial cash sales and noted in this case that HMRC’s allowances for wastage and staff drinks were “fairly generous.” The Tribunal also expressed scepticism about accepting unexplained fixed retail prices over several years as commercially likely.