Closing time muddle
Posted: 1st February 2013
The owner of a public house who failed to pay close attention to his business, putting its day-to-day operation into the hands of an unreliable manager who neglected financial record keeping, has been landed with VAT assessments totalling almost £20,000 more than four years after he quit the premises.
The absence of till rolls and other financial records had made it impossible for the publican’s accountants to prepare precise accounts and Her Majesty’s Revenue & Customs had been constrained to base the ‘best judgment’ assessments upon estimates of the business’s turnover, expenses and profit margins.
In challenging the assessments before the first-tier tribunal, the publican was unable to produce any further documentary evidence but explained that the pub’s financial records had been ‘left in a mess’ by the manager he had appointed to run the business. After he sold the lease, he had other considerable debts in respect of rent arrears and beer that had not been paid for.
The tribunal accepted that the publican was an honest witness but observed: ‘It was clear that he had not paid close attention to the running of the business as, when essential record-keeping had been neglected by staff, he had not discovered this promptly’. In the absence of any further documentary evidence to support the publican’s case, it was impossible to say that the assessments were unreasonable.