In Anthony Leach v HMRC [2019] TC 7180, the first tier tribunal found that a trader’s excessive claims for refunds of VAT was as a result of “deliberate and concealed” behaviour. The consequence is that HMRC can claim tax for the previous 20 years rather than four, and that the highest rates of penalty apply.
VAT Cases & News
Summaries of interesting VAT cases for the SME owner.
In JCA Seminars Ltd v HMRC [2019] TC 6964, the FTT found that HMRC is not obliged to tell a taxpayer that she is using the wrong flat rate of VAT. Also a payment to HMRC is made when received by them, not when posted to the correct VAT number.
The ICAEW Tax Faculty has obtained clarification from HMRC on the availability of agent and business access to digital VAT services after a business has signed up to Making Tax Digital (MTD) for VAT. Copy your VAT certificate first!.
In Cheshire Centre for Independent Living v HMRC TC7182 the FTT found that a supply of payroll services to disabled people was so closely linked to the provision of welfare services that payroll charges were VAT exempt.
In the Royal Opera House Covent Garden Foundation v HMRC [2019] TC7157 the FTT made a helpful analysis as to when taxable supplies can be directly associated with production costs for the purposes partial exemption allocation of residual input tax. HMRC subsequently appealed this decision to the Upper Tribunal who decided that no direct links existed.
In Glasgow School of Art v HMRC [2019] UKUT 0173 the Upper Tribunal held that construction of a new building and rebuilding of another were effectively treated at one building and a single supply for VAT.
It is important to keep a record of your actions in case you are later subject to some kind of fine or penalty for a compliance failure. After spending many days on trying to become compliant for Making Tax Digital for VAT I have decided to retain an online record of my efforts to be tax compliant.