The recent decision of the First Tier Tribunal (Tax) in the case of FS Commercial Limited provides a useful reminder of the need to readily hold and be in a position to produce information that supports your VAT position should HMRC request it.

In this case, HMRC denied input tax recovery on goods and services purchased by the business as the taxpayer was unable (or unwilling) to produce evidence, (in the form of VAT invoices) for the VAT that it had paid.  During the Tribunal hearing, the taxpayer attempted to provide the necessary invoices, however, the Tribunal refused to consider the invoices given that:

1. The role of the Tribunal was supervisory, and it was not in a position to re-make the decision with new evidence; it could only consider whether the decision made by HMRC was reasonable with the information available to it at the time the decision was made; and
2. The taxpayer could not therefore rely on invoices that had not been made available to the original HMRC decision maker.

This case demonstrates the importance of taxpayers holding evidence that VAT has been properly paid when they make a claim for VAT incurred on expenditure.  It also demonstrates that, wherever possible, a taxpayer should produce relevant information requested by HMRC during a VAT enquiry.

Should you wish to discuss the impact of this case or any aspect of an HMRC enquiry, then please contact us by calling 0161 477 6600 or by emailing rob.mccann@thevatpeople.co.uk.