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Using the force

29 July 2014 / Neil Warren
Issue: 4462 / Categories: Comment & Analysis , VAT

Warning: chosen VAT flat rate categories are in danger of attack

KEY POINTS

  • Are HMRC focusing on the oil sector and its chosen flat rate scheme category?
  • It is the taxpayer who chooses the appropriate category.
  • The importance of recording the reasons for the chosen category.
  • Decided cases referencing the choice of rates.
  • A change of rate does not mean that the original decision was unreasonable.

A couple of months ago a reader north of the border told me that HMRC had set up a task force in Scotland to challenge the chosen flat rate categories of many businesses but focusing mainly on workers in the oil sector.

The team’s strategy was very simple: try to recategorise these workers from their chosen category of “business services that are not listed elsewhere” (with a 12% flat rate percentage) into the category...

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