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Chip shop owner wins tax fight as Revenue officials get sums wrong

By Staff Reporter

Published 10/11/2015

Flash in the Pan proprietor Ernest Bustard
Flash in the Pan proprietor Ernest Bustard

An old fashioned chip shop boss, hit with a crushing back tax bill after being accused of understating his profits, has scored a victory over Her Majesty's Revenue and Customs.

Ernest Bustard has been in the fish and chip trade for more than 30 years and his Flash in the Pan takeaway in Queen Street, Ballymoney, Co Antrim, is a firm favourite with hungry locals.

His son Alistair runs another branch in Main Street, Ballymoney, and together they have fed hundreds of thousands of locals since the 1980s.

However, after Revenue officers carried out a spot check on the business, Mr Bustard was told he had underpaid VAT to the tune of more than £26,000 over a six-year period.

He was also hit with late payment 'penalties' totalling over £25,000 after HMRC accused him of "deliberately concealing" and "knowingly understating" his business's true profits.

Now, however, a tribunal has ruled that the taxmen got their sums wrong and that Mr Bustard does not owe a HMRC a penny.

Tax officials had estimated his profit margins at 68% although fish and chip shops generally achieve well under 60%, said Judge Michael Connell.

Mr Bustard accepted he had developed his own way of doing business over his 30 years in the trade and had not kept all the till rolls he should have done.

However, he attacked HMRC's method of calculating the tax due as "flawed", "over-estimated" and based on mathematical error.

Judge Connell was critical of Mr Bustard's record-keeping, telling him that it was not for tax officials to do his book-keeping for him.

It could not be said that HMRC's calculations were "capricious or arbitrary" or spuriously based on mere guesswork. However, the figures arrived at were likely to be substantial over-estimates and did not represent "best judgment", he ruled.

Judge Connell, sitting at the First-Tier Tribunal, overturned both Mr Bustard's tax bill and the penalties.

When contacted last night by the Belfast Telegraph, Mr Bustard said he did not wish to comment.

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