Appeals
and reconsiderations for VAT payers
Almost every VAT
registered business is likely to come under the scrutiny of HM
Revenue & Customs (HMRC) at some point. However, this need
not be cause for concern as assessments are frequently incorrect
or may be reduced following a review of the issues involved.
Assessments arise for reasons ranging from misinterpretations of
the law to internal performance measures at HMRC which encourage
the issue of assessments. However in our experience it is
rarely the case that HMRC will recognise a mistake whether in
law or fact. Much vital time can be wasted seeking a
reconsideration with costs mounting none of which may be claimed
from HMRC.
The time spent
negotiating with HMRC prior to the making of an appeal cannot be
claimed from them. Whereas the time spent by advisors
understanding the issues and preparing the grounds of an appeal
may be recovered in the Tribunal.
Typical issues
leading to a VAT dispute range from routine late submission of
VAT returns and simple accounting errors to complex questions
about the nature of your business activities and the appropriate
VAT treatment. In some cases this can lead to HMRC
refusing to pay VAT due to your business with potentially
disastrous consequences.
It is important to
seek advice early. HMRC recently (January 2009) announced
their intention to carry out interviews with tax payers to
ascertain whether they are engaged in inappropriate business
activities such as carousel fraud or other MTIC activities
(Public Notice 161). Such interviews should be undertaken
with great care as the results may lead to the withholding of a
VAT payment.
HMRC has 3 years to
make an assessment (4 years from 01.04.10) but the taxpayer only
has 30 days from the date of a decision or an assessment in
which to make an appeal and although the Tribunal regularly
extends this time limit such requests require careful
preparation.
Funding may be
available for such appeals and the Practice has good relationships
with funders and insurers specialising in VAT appeals. This approach can protect
the Appellant from the
need to finance litigation from cashflow and any adverse costs orders.
Tony Guise is a
member of the VAT Practitioners' Group.
Free support
information is available here Guise
Solicitors | Publications - VAT/MTIC fraud
To discuss any
issues of concern or to find out whether
your case would qualify for funding please telephone one of
our Partners on 020 7264 0350 or contact us via
e-mail
