Erroneous invoice

The taxpayer company erroneously claimed input tax of £19 698 in its October 2011 VAT return in relation to work that had not been undertaken.

HMRC disallowed the claim and issued a penalty for £14 773 on the basis the error was deliberate and concealed.

The business appealed saying the mistake was careless rather than deliberate which the fine should reflect – and the directors insisted the financial sanction should be reduced further to take into account the help they gave the Revenue in establishing the inaccuracy.

A supplier had issued an invoice for “work carried out” but it ought to have read “work to be carried out”.

Confusion arose between taxpayer and Revenue when a director of the taxpayer company said the work had indeed been done but then later reported that it had not. The change of information led the tax department...