HMRC’s surprising treatment of two sole traders

Am I going soft in my old age being pleased that someone illegally importing hand-rolled tobacco into the UK escaped a £220 000 VAT assessment after a successful appeal in the First-tier Tribunal? After some serious contemplation my answer is a categoric ‘no’. This is because the assumptions made by HMRC in reaching its conclusion about this figure along with requiring the taxpayer to be VAT registered on a compulsory basis were to put it bluntly absolutely ridiculous. And in a case of another sole trader a grocer running a corner shop HMRC used some extraordinary figures which I will also consider in this article. The two decisions were released within 14 days of each other – a classic case of the buses arriving together syndrome.

Trading arrangements

HMRC...