The Yummy Yummy Takeaway, based in Lewes, appealed against inaccuracy penalties for corporation tax, which totalled £50,321 and VAT abuse in the sum of £34,806.

HMRC issued the assessments on the basis that the takeaway had suppressed its takings and intentionally concealed cash sales for both VAT and corporation tax.

As part of the HMRC investigation, three unannounced visits were undertaken. During these visits, the tax authority found that cash sales were materially greater than on any other day.

HMRC discovered that Yummy’s corporation tax returns were inaccurate in respect of accounting periods 02/15 (£14,729.31), 11/16 (£17,923.57) and 07/17 (£17,668.81).

On 15 September 2016, HMRC made its first unannounced visit to the takeaway. The appellant, Paul Donaldson, was asked to perform his cashing-up routine. The recorded sales were £770.40 of which cash on that night was £431.80 (56% of total takings).