VAT Appeal procedures

Forum Categories GENERAL VAT DISCUSSIONS VAT Appeal procedures

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  • #55513

    hi, i am new to the forum and hope somebody can help me.

    My client has recently had an assurance visit from HMRC. An assessment has been issued by HMRC in respect of an alleged under-recording of sales in the last 4 -5 years. I believe this can be explained by timing differences and other accounting adjustments. I would like to contest this matter as far as the First Tier Tribunal.

    any chance I can win the case and what is the procedure for an appeal process?



    Firstly an assessment is based on commission’s “best judgement” [VAT Act 1994] and within time limits [Weight Watchers helps to explain]:

    – 2 yrs from VAT return period OR 1 year after new evidence
    – Overall 4 years max (20 years if fraud or criminal conduct)
    – if there is a court decision ≠ reset of the 1-year clock. If HMRC was concerned they could raise a “protective assessment”
    – No time limits for “Books of prime entry” requests

    If no evidence of carelessness/deliberate understatements, resist penalties and appeal.

    The appeal process is as follows:

    1. You are entitled to a review by independent office <30 days & HMRC to complete review <45 days
    2. Review decision can be appealed to either FTT or UT <30 days
    3. When applying for a review, the courts need details of the appellant & representative details, details of case,
    4. Noting requirement for tax to be paid before Appeal court (but not on a Review) unless potential hardship application and interest is due date to settlement
    5. The FTT court categories court cases before UT – default paper (not hearing), basic, standard or complex (tend to go straight to UT)

    I advise to get legal representation if need be. OR consider potential agreement prior to hearing. And if the case goes that far and you know you are losing, you have potential to withdraw and avoid further costs.

    Also note the courts do not reimburse costs unless if party HRMC acted unreasonable (rare for HMRC to pay) hence weigh costs vs benefit before appeal.

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