November 2010
Under the Spotlight
VAT is not the only tax to be going up in the New Year- find out which other tax is set set to go up in 2011 which no-one has mentioned yet.
This month on The VAT Blog
Our new VAT Blog is proving to be very popular, here’s a quick round-up of the issues we’ve discussed in the last month, just in case you missed any:
- Been challenged by HMRC? Always getting it in writing… read more
- The Tax Man’s on your case… read more
- All change for Local Authorities ….read more
- Private Sector must now work hard to create jobs….read more
- VAT on business entertainment of overseas customers …read more
- Building a new home? If you are planning on doing it DIY style…read more
HMRC News Round-up
Time to Pay Arrangements
There is increasing press coverage of HMRC’s tightening stance with regard to time to pay arrangements and we would therefore emphasize in the current climate the need to approach HMRC at the earliest opportunity to discuss how they can discharge all their liabilities, be they VAT, PAYE or NIC.
HMRC’s Website
HMRC have rolled out more toolkits to help advisers avoid errors when filing client returns and of course these are available to the tax payer as well.
One of the toolkits covers VAT Input Tax, which we have looked at and find that it is a useful guide, but if you still need help on a specific issue then do contact us
If in doubt…appeal
A recent win of £16,315 for a TVC client just goes to show how fighting hard against HMRC can still have a positive outcome without having to attend Tribunal. The case was specific in its facts but revolved around whether a property fitted the definition of a ‘dwelling’ on the basis of it being ‘designed or adapted as one’ despite it never having undergone planning to convert it from commercial premises. Despite an initial policy unit response which disagreed with our contention that the property was commercial for VAT purposes, HMRC subsequently altered its view before the Tribunal date was set and therefore withdrew the assessment. Highly unusual, but worth considering whether the fact that a Tribunal appeal was lodged was a factor in them changing their mind…..
News from the Tribunals
TGS Construction Services
This case involved the appealing of a Default Surcharge when the excuse was the insufficiency of funds. In this case the failure of a main customer to pay gave rise to a reasonable excuse and on this basis the VAT & Duties Tribunal allowed the appeal, so a surcharge of 15% of the VAT paid late was cancelled.
Gilders Transport Limited
Here a further five Default Surcharges were challenged because of the insufficiency of funds following the Foot and Mouth outbreak. Delayed payments by DEFRA created a severe strain on the tax payer’s cashflow and it was unable to meet its VAT repayments. The insufficiency of funds was a “reasonable excuse”.
Express Food Supplies
This was an appeal against a penalty that was imposed by HMRC in respect of an inaccurate VAT Return, the mistake being made by the tax payer’s temporary bookkeeper, HMRC deemed the error to be careless. The prompt disclosure however did not affect the decision and the Tribunal upheld the penalty assessed at 15% of the potential lost revenue. This is the first case we have seen of a careless error attracting a penalty.