LISBON: Taxman orders trader to pay an astonishing £930,000 when actual tax due was barely 2pc of this sum. A scaffolder who failed to declare £11,000 in tax has been charged almost £1 million by HM Revenue & Customs in a calculation bungle that experts say is a “shocking” and “wholly inappropriate” estimate of one man’s income. The taxman accused Matthew Hodges of evading £529,536 in VAT due on the scaffolding projects he carried out since 2006. On top of the unpaid tax, HMRC demanded £399,734 as a penalty for non-payment.
But Mr Hodges, a sole trader from Downe in Kent, actually owed just £11,153 in unpaid VAT from his business, Aqua Blue Scaffolding, according to a tax tribunal held in May. Documents published this week show Mr Hodges had failed to declare VAT on up to nine in ten projects he carried out in Kent and South London between 2006 and 2011, in many cases taking cash in hand as payment.
Without proper records to prove his income, the taxman came up with its own estimates, proposing a figure of more than half a million pounds in unpaid VAT. The tribunal said he actually owed £11,153, based on estimates of the reasonable number of jobs he could have completed in the five-year period.
