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John Pryor (TC4702)
Flat rate scheme error by taxpayer
The taxpayer a postmaster operated the flat rate scheme on his main business activity of "retailing food tobacco and confectionery newspapers or children’s clothing". He applied the correct rate 2% but should have increased it to 4% after January 2011. The error came to light in 2014 and this led to an assessment of £13 869 for the underdeclared VAT. The taxpayer asked HMRC whether he could withdraw from the scheme retrospectively because his extra liability with normal VAT accounting would be smaller than the amount assessed. HMRC refused.
The taxpayer said HMRC should have notified him of the percentage change in 2011 and had they carried out an earlier compliance visit the tax owed would have been less than £13 860. He...
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