All change for Local Authorities
Well there are certainly some challenges for the public sector within the Spending Review. With asset sales, further outsourcing and partnering arrangements, the shape of Govt Departments and Local authorities alike will change considerably over the next 4-5 years. It appears that these bodies will focus more on commissioning services rather than delivery, which will be undertaken by the private and charity/ voluntary sectors.
From our perspective many of these initiatives will bring VAT complexities and VAT management issues which will need to be addressed to make sure the arrangements don’t cost 20% more than they did previously!
Find out more about how we can help you stay on budget.
The tax man’s on your case
We’re not surprised by today’s announcement in the spending review that HMRC have been given £900m to clamp down on tax evasion, which will hopefully result in £7bn in tax.
Generating extra tax revenue is critical to the whole exercise of reducing the budget deficit and will help keep interest rates low.
On a practical level this means though that HMRC have now been given extra resources to prosecute businesses and individuals who fraudulently evade VAT or other duties which can lead to heavy penalties and in some cases company directors, for example, being penalised personally.
What’s clear from today’s news is that we all need to much more careful – there are no carrots in this game, only stick, stick, stick.
If you are facing, or think you might be facing a VAT visit we have tax investigation experts on board who can provide a helping hand when you’ve got the tax man on your case. Find out more
Been Challenged by HMRC? Always get it in writing!
We have recently been involved with a successful complaint to the Revenue Adjudicator on behalf of a client. The case is unusual but involved a claim by us that the client had been misdirected by HMRC in the past to their detriment. The taxpayer had received a VAT visit in 2008 after which a substantial assessment over £270K was raised as this officer disagreed with the VAT treatment of certain supplies to non UK customers.
However this treatment had been questioned and accepted in a previous visit that took place in 2003. A further visit took place in 2005 in which similar transactions were reviewed but not questioned.
When questioned by the Adjudicator, HMRC relied on the fact that they had issued a VAT notice to the taxpayer in 2005 and thus they maintained the assessment was valid. However the Adjudicator ruled that as the officer could not provide any further information and failed to provide an accompanying letter with the VAT notice drawing the taxpayer’s attention to the correct treatment, they had failed to provide sufficient advice
The Adjudicator upheld our complaint and directed that HMRC must withdraw the assessment and reimburse costs incurred.
We would always recommend in these situations that you always get written confirmation from HMRC.
If you need any further information, then do contact us
Time To Pay Agreements – HMRC Getting Tougher?
As a quick reminder, a ‘Time to Pay’ Agreement is an agreed payment plan with HMRC to pay VAT debts (as well as other taxes).
An initial call to HMRC’s Payment Support Service on Tel 0845 302 1435 is required (before a demand for payment is received). They will ask initial questions regarding how much the debt is, how long you wish to pay this over etc. It is likely they will request some further documentary evidence to support any proposals put forward.
We have recently renegotiated some TTP agreements where uncontrollable factors have meant client’s are unable to stick with the original agreement. Be warned though that HMRC’s patience will run out if this occurs regularly and they will resort to legal action!
Recent press has suggested that HMRC are getting tougher on agreeing TTP agreements – we would be interested to know what everyone is experiencing out there…….
The importance of charging VAT correctly!
A case has come to our attention this week regarding a refused DIY Housebuilder’s claim.
The taxpayer paid VAT to a builder on a new build dwelling thinking they could reclaim the VAT from HMRC. HMRC refused as the VAT was incorrectly charged (zero rate applicable to new build), the taxpayer needed to get credit from their builders’ yet two of his suppliers had refused to refund.
The Tribunal agreed with HMRC that it was not up to HMRC to refund VAT incorrectly charged. This confirms again that VAT incorrectly charged CANNOT be reclaimed from HMRC.
You have been warned….