I have no idea but a good question. I imagine that if the tax office had reason to believe you were running a business at zero profits and it was then also deemed to be a 'lifestyle business' rather than a 'real business' (whatever they are!) - questions would arise if you claimed more VAT back every quarter than you paid, it could be suspicious.
In the real world I think the government should be thankful for anyone who can run at zero profit or no dependence on the state as long as they are sustaining themselves, be it cash in hand or not - they put no strain on our much needed benefit system, using initiative to get through. What more can they ask!
Tax is needed I give it that, doing your own tax records is a real shitter though thats a fact.
Paperwork, shmaperwork, grrr
Ta
Baz