In John David Pryor t/a Purfleet Post Office v HMRC [2015] TC04702 the First Tier Tribunal (FTT) agreed that HMRC had not been unreasonable to deny retrospective relief from a VAT Flat Rate scheme despite the hardship caused.


Mr Pryor ran a Post Office and shop from October 2006 and applied the flat rate scheme (FRS) percentage of 2%, correctly describing his business as 'retailing food, confectionary, tobacco, newspapers, or children's clothing'. 

He failed to apply the increased FRS percentage of 4% for this type of business when it was introduced in January 2011.

In March 2014, HMRC notified Mr Pryor of the increase in the FRS percentage and issued an assessment to collect underdeclared VAT of £13,869.

Mr Pryor wrote to HMRC to withdraw from the FRS in March 2014 however his request for retrospective withdrawal was denied by HMRC as there were no exceptional circumstances which would allow a departure from the standard policy of refusing such requests.

Mr Pryor appealed this decision on the grounds that:

  • HMRC had not notified him of the percentage change when it occurred in January 2011.
  • HMRC could reasonably have checked the Returns earlier which would have resulted in a lower underpayment.
  • The hardship caused by the payment of the assessment amounted to exceptional circumstances and should have enabled HMRC to agree to his request.


In making its decision to dismiss the appeal, the FTT

  • Agreed that it would be helpful if HMRC could notify traders of a change in percentage, but noted that there was no statutory obligation for them to do so.
  • Confirmed that the onus was on the taxpayer to pay any underdeclared VAT as a result of using the wrong percentage.
  • Accepted that the business was in a worse position as a result of refusing the application to withdraw but that this did not amount to exceptional circumstances, and nor did any hardship that followed.

The jurisdiction of the FTT was limited to considering whether HMRC's decision was reasonable, and in this case the tribunal agreed that it was.

Case reference John David Pryor t/a Purfleet Post Office v HMRC [2015] UKFTT TC04702