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HMRC Charges £700k in Penalty Charges to Pub Owner

Published by Prerana
Posted Date: May 21, 2024 , Modified Date: May 21, 2024

HM Revenue and Customs (HMRC) charges almost £700,000 only in penalty charges to a pub owner in South Wimbledon for unpaid corporation tax.

The pub owner appealed to the First Tier Tribunal (FTT) against the penalty charges of HMRC, claiming he was not aware that the HMRC and the UK government were operating during the COVID-19 pandemic. However, the tribunal dismissed the appeal.

What Were the Charges Based On?

A pub owner sold his pub for £1 million in 2012 and did not pay the Corporation Tax Gains on the sale of real property under Section 455 of the Corporation Tax Act 2010. In addition, the owner owned a car park attached to the pub’s property until 2015. He was liable for the VAT on all the car parking fees, which were paid in cash through the till in the pub from 2009 to 2015.

HMRC opened an enquiry for the company’s tax return in 2017 for the tax year 2015 and issued an information notice in 2018. The Corporation Tax penalty amounted to £371,119.03, the VAT penalty was £113,749.54, and the civil evasion penalty was £211,743. In total, the pub owner owed £696,611 in penalties, and the total amount owed amounted to £1,464,720.

HMRC’s Investigation

The pub owner’s company went into liquidation on 1 June 2018, and a meeting was set up between the liquidator, the pub owner, and the HMRC investigating officer. So, HMRC investigated the Company’s Tax Return and asked for evidence in 2019. The HMRC investigating officer sent multiple emails and letters to the owner to provide guidance and set meetings. However, neither the pub owner nor his representatives responded.

Penalty charge notice

Additionally, the pub owner claimed that he sent multiple emails to the HMRC officer over the course of four years. But no records were found. Eventually, the pub owner appealed HMRC’s decision of penalties on 16 January 2023.

The owner claimed that his late appeal was because he suffered from a heart attack, and he had valid hospital documents to back this claim. However, he also claimed that he thought HMRC was not operating during the Covid-19 lockdown, which was not valid.

Ultimately, the tribunal dismissed the case as there were no proper grounds of evidence of the claims made by the pub owner, making him liable for the £700,000 penalty sum.

Conclusion

A South Wimbledon pub owner is liable for almost £700,000 penalty charges to HMRC because he failed to pay corporation tax, VAT, and more. The pub owner’s excuses for the late appeal to the tribunal were not backed by evidence, while HMRC has multiple records of contacting the owner to provide guidance and support.

So, keeping these things in mind, the tribunal judge decided to dismiss the appeal made by the pub owner.

Prerana
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