Scaffolder builds case for reduction in £400K VAT penalty

A scaffolder who faced nearly £400,000 in penalties for under-declared VAT has had the sums considerably reduced after a First Tier Tribunal (FTT) found fault with HMRC’s calculations, although the tribunal agreed with the tax authorities that his behaviour had been dishonest

Matthew Hodges was a ‘one man band’ trader and the director of Aqua Scaffolding Ltd (ASL). He appealed against a VAT civil evasion penalty notice for £202,524 issued by HMRC on the basis that an under-declaration of VAT by ASL was attributable to his dishonest conduct, and also appealed against a £192,170 penalty assessment issued by HMRC on the basis of his ‘deliberate inaccuracy’.

The tribunal heard that assessments for under-declared VAT had been raised by HMRC following a ‘street sweep’ of Hodges' local area in which they had recorded scaffolding with ASL sign boards attached to it at ten different addresses and yet had only been able to trace the sale from one of the ten addresses as having been recorded by ASL and included in its VAT returns.

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