Case Study: Sharp VAT Eye Saves Critical Medical Company £67,000

Client profile

Our client, a government-approved medical company providing critical COVID-19 services, experienced an intense dispute over VAT returns with HM Revenue and Customs (HMRC).

Problem statement

Upon submitting their VAT returns, the company encountered a discrepancy between what they considered a standard rate and what was exempt. Several returns, including one worth £67,000, were submitted at a zero percent rate under the assumption that services analysed by a laboratory, doctor, or medical professional should be exempt. However, HMRC refused these returns, insisting on a standard 20% rate.

This discrepancy not only led to a refusal of their VAT returns but also halted cash flow and threatened the company's international operations, causing significant strain on their business.

The VAT People's intervention

The medical company searched online for VAT experts and sought the services of The VAT People, specifically, Rob. For over six months, Rob worked closely with the client, providing robust legal advice and support through a tribunal process. He developed a compelling case by delving into the intricacies of the VAT return issue, especially emphasising the significant role that qualified medical professionals played in  the company's services.

Rob's expertise extended beyond providing advice on VAT law. He supported the client by preparing all the necessary documentation and guiding them throughout the process. His dedication to the case included offers to provide a barrister and even potential representation in London if required.

Resolution and outcome

Rob's excellent understanding of VAT legislation, combined with his diligent work, led to a favourable outcome for the client. The disputed VAT returns were successfully overturned in the company's favour without the need for a formal tribunal hearing. Additionally, Rob advised the client to resubmit all VAT returns at the corrected rate, helping them avoid potential penalties for late submissions.

Client feedback

The client expressed profound gratitude for Rob's invaluable assistance, appreciating his professionalism, knowledge, and expertise. They particularly highlighted his acumen in recognising the involvement of medical professionals in of their services, contributing significantly to the success of their case. The client acknowledged Rob's help as a 'game-changer' and declared him as the 'VAT Doctor', healing their VAT complications.

Lessons learned

This case underscores the importance of specialist advice when dealing with complex VAT issues. The client, in retrospect, realised that initial consultations with general legal representatives were not as productive, underscoring the value of a VAT specialist's input. In such intricate cases, specific knowledge and experience, such as those provided by The VAT People, can prove to be a decisive factor in the outcome.