Late registration and flat rate scheme

The taxpayer was a sole trader who repaired gates for private householders. He exceeded the VAT registration threshold in October 2012 so had an effective date of registration of 1 December 2012. Using best judgment HMRC assessed tax of £21 335 for the period to 31 March 2015 and £9 150 for the year to 31 March 2016 – these were calculated using the flat rate scheme rate of 9.5%. It also imposed a late registration penalty of £5 525 – later reduced to £5 356 due to an arithmetical error. 

However the taxpayer submitted a return for the year to 31 March 2016 showing VAT due of £5 449. He had appointed a new accountant who had applied for the flat rate scheme on behalf of the taxpayer. 

The First-tier Tribunal said the registration date was correct and the penalty was justified but it seemed that more VAT...