Late appeal against cancellation of VAT registration

The taxpayer applied to register for VAT in October 2013 saying it intended to make taxable sales in the future. It declared its business activity on the application form as ‘social care – children’s home’. HMRC issued a VAT number four days later the registration taking effect on 1 November 2013.

No VAT returns were submitted by the company and HMRC cancelled the registration on 16 September 2015. This decision was solely based on the fact that the company’s fees of childcare were exempt from VAT by virtue of VATA 1994 Sch 9 group 7 item 9. The company was registered with OFSTED hence the reason for exemption. It made no other sales.

The director said that it was unfair that he could not claim input tax on the company’s expenses because local authorities were allowed to claim VAT (s 33). He also said that...