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The importance of choosing the correct VAT registration date
KEY POINTS
- HMRC specifically agreed that expenses were not allowable for VAT but a claim was made.
- The claim for repayment of indirect tax was based on information in direct tax manuals.
- A penalty was charged for a “deliberate error not concealed”.
- Both HMRC and the taxpayer’s adviser came in for criticism by the tribunal.
- A claim should have succeeded if a different registration date had been chosen.
Imagine this: a VAT return is submitted to HMRC and input tax on specific expenditure is not claimed. On a compliance visit HMRC confirm that the business was right not to make the claim.
However after the business owner discussed this with friends and colleagues (the equivalent of getting “tax advice at the pub” as we called it in my Customs...
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