In KSM Henryk Zeman SP Z.o.o. v HMRC [2021] UKUT 0182 a Polish company was caught out by a badly worded VAT registration form and HMRC rejected its registration. It should, in fact, have been registered and HMRC later raised a VAT assessment. Did it have a legitimate expectation to expect fairness?
VAT Cases & News
Summaries of interesting VAT cases for the SME owner.
In Claims Advisory Group Limited v HMRC [2021] UKUT 0199, the Upper Tribunal (UT) confirmed that claiming Payment Protection Insurance (PPI) compensation on behalf of individuals was not a VAT exempt supply of insurance services.
In Brough East Yorkshire Limited v HMRC [2021] TC08213, a Chinese takeaway successfully appealed a £34k VAT assessment. HMRC's one-night invigilation of the food outlet failed to note suppression of cash and the methodology in making the assessments was flawed by poor sampling and failure to adjust for price changes.
In Awards Drinks Limited (in liquidation) v HMRC [2021] EWCA Civ 1235, an appeal against a VAT best judgement failed due to a lack of credible evidence from the company and its director. Although HMRC suspected that the company was involved in tax fraud and money laundering, this did not displace the fact that the burden of proof lay on the company to explain its income.
HM Treasury has published a summary of responses to their call for evidence ‘VAT and the Sharing Economy’ which opened in December 2020.
In Kingsley Douglas v HMRC UKUT 0163, the Upper Tribunal (UT) dismissed the appeal against ‘best judgement’ VAT assessments upheld by the First Tier Tribunal (FTT). The UT found all the evidence had been properly taken into account by the FTT.
In Dollar Financial UK Ltd v HMRC [2021] TC8199, the First Tier Tribunal (FTT) struck out an appeal regarding the backdating of VAT Group membership. The legislation did not provide for backdating and there was no HMRC decision to appeal so the tribunal did not have jurisdiction.
- VAT and value shifting: Summary of responses
- Failure to notify VAT option to tax not acceptable
- Sole director personally liable for VAT penalties
- EU Advocate General rules that VAT deductions require a VAT invoice
- Receipt of subsidies did not restrict VAT recovery
- R & C Brief 10 (2021): Repayment of VAT to overseas businesses not established in the EU and not VAT registered in the UK