Tax Appeals Commission determination 02TACD2024 regarding Income Tax & VAT, 2024

Administrative Decision Number02TACD2024
Date20 October 2023
Subject MatterIncome Tax & VAT
1. This is an appeal of income assessments made by the Revenue Commissioners (“the
Respondent”) to additional income tax and Value Added Tax (“VAT”) due by the Appellant
for the years 2005, 2006, 2007 and 2008 (“the relevant years” when referred to
collectively). The notices of assessment to income tax in respect of each year under appeal
issued on 2 February 2011. The notice of estimation of VAT due for the years 2005 - 2008
issued on 9 February 2011. The sum of the income tax and VAT assessed as due for the
relevant years is €342,231.
2. In making this determination the Commissioner had the benefit of written and oral
submissions made by both parties.
Background & Evidence
3. During the relevant years the Appellant operated a fast food business called “
(“the business” or “the Appellant’s business”) from a rented premises on
. The Appellant ceased operating the business on or
about 2011.
4. On or about 18 April 2007, the Appellant was informed by the Respondent that it intended
to commence an audit inquiry into his tax affairs for the tax years 2005 and 2006. On 14
July 2009, the Respondent wrote to the Appellant informing him that the inquiry was to be
extended to include the tax years 2007 and 2008.
5. Arising from the inquiry, the Respondent assessed the Appellant as having a charge to
income tax for the year 2005 of €56,482.83, 2006 of €54,544.37, 2007 of €75,485.48 and
2008 of €70,668.45.
6. The Respondent also assessed the Appellant as having underpaid VAT in the amount of
€86,063 for the period 1 January 2005 – 31 December 2008.
7. The commencement of the inquiry was preceded by a cold call visit by officers of the
Respondent to the premises of the Appellant’s business on the night of 24 November 2006,
during which they conducted an examination of the Appellant’s till readings. It was put to
the Appellant in cross examination by counsel for the Respondent that upon the ending of
the visit he immediately shut up shop for that night. In answer to this the Appellant said
that he was not present at the time of the visit and did not know at what hour the business
was closed by his staff. The Appellant agreed that on a busy Friday evening he would in
the normal course stay open until approximately 3 am.
8. The value of the sales per the till readings (known as Z reports) at the time of inspection
was €3,221. The Appellant gave evidence that the night of 24 November 2006 was
especially busy. He said this was so because the well-known band “ ” was holding a
concert nearby in University. No evidence was produced to corroborate the
assertion that there was such an event held that night.
9. The Appellant gave evidence in examination in chief that the business was never a great
success”. In part, this was on account of competitors in the vicinity, including
takeaway and the establishment of a McDonalds elsewhere in .
10. The Appellant gave evidence in examination in chief that the great bulk of the business’s
sales involved the selling of takeaway meals, primarily burgers and fish and chips, to
customers who attended its premises. He stated that the number of sales that were made
by way of delivery to the location of a customer was “not significant and that the business
relied heavily on sales made around or slightly after the closing time of pubs located in the
11. The Appellant said in evidence that he had only ever had one employee, ,
who performed the role of delivery driver on a full time basis. All other employees were
assigned to work in the premises itself. The Appellant was questioned in cross examination

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