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Late joiner

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27 March 2012
Issue: 4347 / Categories: Forum & Feedback , VAT
A trader has been using the VAT flat rate scheme since 2007, but it has now come to light that he did not formally register to use it. Does this mean he will have to recalculate the VAT liability?

One of my clients has been using the flat-rate scheme since 2007 and has made very good profits compared to normal VAT accounting.

However I have just discovered that he never formally applied to HMRC to join the scheme. I am aware that HMRC’s policy is to refuse a retrospective application but it would seem harsh if HMRC denied a backdated request in these circumstances.

The VAT public notice on the scheme seems to be silent on this predicament.

Are my concerns justified that HMRC could refuse to let my client join the scheme on a retrospective basis (only allowing him to join from a current VAT period) and then insist we recalculate his VAT liability for the past four years based on normal VAT accounting?

I would be grateful for any advice readers can give on this subject.

Query 17 964 – Worried

Alex Millar...

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