CH72140 - Penalties for Failure to Notify: Types of failure to notify: Deliberate and concealed - Examples
Example 1
Jamil is aware that his turnover exceeds the threshold for VAT registration. He makes a number of sales for cash and cheque and prepares invoices excluding the cash takings. When he adds up his weekly takings and enters the total into his records he ignores the cash. During a compliance check of his income tax return Jamil produces the false invoices which he has prepared to support the figure of takings in his records.
Preparation of the artificial invoices and giving them to us represents an attempt to conceal the deliberate failure to register for VAT.
Example 2
Thomas has not made any tax returns. You find that he acquired a property in 2012 from which he receives rental income and has failed to notify chargeability for 2012-13 onwards. When you ask about the source of the funds used to purchase the property, Thomas says the money was loaned to him by overseas family members. You later find that Thomas owned a number of rental properties before 2012 and that the money actually came from the sale of one of those properties. Thomas has deliberately failed to notify his liability for all years. For the earlier years, when asked to explain the source of his funds, Thomas took active steps to conceal his liability. For those years, the failure is therefore deliberate and concealed.
Example 3
Farmer Giles discovers a gravel deposit on his land and starts recovering and selling the gravel. However, to give himself a competitive edge he does not register for the aggregates levy and states on sales invoices that the item sold is soil.
We would regard this as deliberate and concealed.