Reasonable steps taken

The taxpayer submitted invoices to reclaim VAT on the construction of a new property through the DIY housebuilders scheme. HMRC disallowed part of the claim and imposed penalties on the basis that the taxpayer had made careless errors.

The taxpayer appealed.

The First-tier Tribunal noted that although the taxpayer was a subcontractor in the building industry he had no previous experience of the DIY scheme and was not familiar with the principles HMRC applied to claims.

Further he had employed an accountant to help submit the claim because he recognised he needed assistance. He had signed the forms believing them to be accurate and that belief was “reasonable”.

The tribunal said the taxpayer had taken reasonable care to avoid mistakes. He appointed an adviser who was called to apply his knowledge and skill of the DIY scheme to complete the form correctly. The taxpayer had no reason...