.png)
.png)
A client has not submitted VAT returns for three years. There is an outstanding liability of about £10,000, to which a 30% penalty will apply. However, if the flat rate scheme were to be applied, the liability would be reduced to £nil
I have taken on a new client who has not been very compliant with his VAT returns. In fact there are three years’ returns outstanding and he has been paying central assessments issued by HMRC during this time.
My concern is that if we submit the VAT returns now the client will be liable to a potential 30% penalty on the difference between the liability on the returns and the central assessments issued by HMRC. This would cost him £3 000 because the net liability is £10 000 over the three-year period.
Is my understanding of the penalty system correct on this point?
I also wonder whether there is a possible solution to this problem. If he were allowed to join the VAT flat rate scheme retrospectively his net liability would be £1 000 VAT overpaid over the three years which would save both...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
