Liability to account and pay output tax

The taxpayer applied to be registered for VAT from 9 March 2021 having taken over a garden landscaping business from a sole trader from this date. There was a delay in HMRC issuing a VAT registration number until 27 July 2021 so the director thought this was the date that the company should start charging VAT to its customers and not the earlier date of 9 March.

The company’s first return to 31 August 2021 showed a net refund of £2 183 but did not declare output tax on sales made between 9 March and 27 July. HMRC issued an assessment for £19 401 ie output tax of £29 344 less input tax of £9 943 and also blocked the repayment claim. This was on the basis that the company had been a taxable person as defined by VATA 1994 s 3...