VAT registration is not a business

Intention to make taxable sales

Two companies under the sole control of the taxpayer registered for VAT in 2013 and 2014 and claimed a series of VAT repayments over several periods. HMRC disallowed all repayment claims and issued ‘deliberate not concealed’ penalties which it later downgraded to ‘careless’ on the basis that neither company was in business and therefore neither was entitled to register. The department used its powers under VATA 1994 Sch 1 para 13(3) to cancel the registrations retrospectively to the day they were registered.

When it registered for VAT in August 2013 Photogen Promo described its main activities as including ‘internet adverts magazine photography software’. It submitted repayment claims for £4 997 and £1 982 for periods 10/13 and 1/14. It was the fifth time that the taxpayer had tried to register a business for VAT. He made his sixth application...