Various investigation methods used in particular trades are discussed below. It should be noted that case law suggests, that the more evidence which can be produced to support a taxpayer's records and to repudiate any credibility exercise carried out by HMRC, the more successful any defence is likely to be1.
Contract tailors
Garments are frequently made up from lengths of cloth supplied by a customer. Sufficient cloth is supplied for a specified number of garments, trimmings and wastage, but a skilled cutter can obtain more than the specified number from the cloth provided. The excess is known in the trade as 'cabbage', and becomes the property of the tailor.
When examining a contract tailor's books, it is to be expected that the assurance officer will look for sales of 'cabbage', or garments made up therefrom. An assessment may well follow if an insufficient explanation is offered for the absence of such sales2.
In Jandu3, an assessment in respect of underdeclared sales of adult clothing was based on
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