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HMRC rejected £9,106.22 of Mr Coates claim on the basis that VAT had been incorrectly charged by the supplier on a number of invoices meaning it was not valid for reclaim. Upon investigation, it transpired that the claim was incorrectly completed by a junior member of staff from Mr Coates accountants before being reviewed and corrected, however, the original incorrect version of the claim was submitted. HMRC then imposed the minimum penalty for a prompted disclosure of a careless error which amount to 15- of the potential lost revenue (£1,362.18). The first-tier tribunal found that Mr Coates took steps equating to reasonable care when completing the form and signed the form provided to him by his accountants believing it to be accurate. HMRC's original ruling was this overturned and the penalty was repealed. Claims of this nature made to HMRC are rarely straight forward and inaccuracies can result in a loss of income. Please call our helpline with any queries relating to this matter and ensure your approach to VAT does not leave you liable to penalties.  Furthermore, this case demonstrates that it is often possible to challenge penalties that are levied by HMRC and we thus encourage you to discuss any penalty notices that come across your desk with a member of our team.

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