Dispute Prevention and Resolution
If you find yourself involved in a conflict with HMRC regarding the payment of VAT, we can help you to find a solution. The VAT People has years of experience in dealing with this type of issue and can guide you every step of the way to ensure your best interests are prioritised.
Speak to one of our experienced VAT consultants about your circumstances today by calling 0161 477 6600, or fill in an online enquiry form and we will get back to you at a time that is convenient for you.
About HMRC disputes
Unfortunately, many businesses can find themselves involved in a position of conflict with HMRC for a number of reasons. The most common causes of disputes include:
If HMRC has taken an opposing view on the VAT liability of a transaction, or a series of transactions.
When a business fails to address a VAT matter in a timely manner, such as a late application to register for VAT, which can incur penalties.
Where there have been errors in submitting information to HMRC, which again can lead to penalties.
In most cases, such issues can be avoided by seeking advice from a VAT expert. This approach does mean that businesses need to ensure they are considering transactions in advance. It is always advisable to consider the transaction in question while there is time to ensure that the correct documents are obtained to support the required VAT treatment, or while it is still possible to amend a transaction in order to achieve a different outcome.
Businesses looking to prevent problems where complex VAT issues are concerned often find that the best route to take is to seek non-statutory clearance on a point.
The VAT People has a great deal of experience in dealing with businesses that believe they have received incorrect advice from HMRC and, despite following this guidance, have incurred an unexpected VAT liability. However, in most circumstances, advice provided by HMRC is only an opinion and does not override the law. HMRC will not accept responsibility for its actions if it can avoid doing so.
Difficulty for businesses
Up until 1st April 2009, HMRC operated an Extra Statutory Concession, which was specifically designed to protect taxpayers from injustice. This stated:
When it is established that an officer of HM Customs and Excise (HMRC), with the full facts before him, has given a clear and unequivocal ruling on VAT in writing, or it is established that an officer knowing the full facts has misled a trader to his detriment, the commissioners of HM Customs and Excise would only raise an assessment based on the correct ruling from the date the error was brought to the attention of the registered person concerned.
This concession was withdrawn with effect from 1st April 2009.
Adding to the often difficult situation that businesses face, the First Tier Tax Tribunal is not permitted to hear an appeal based on the fact that HMRC gave incorrect advice.
How is non-statutory clearance different?
A non-statutory clearance is a specific service that HMRC is required to provide to any business that has identified a material uncertainty regarding tax treatment. HMRC has produced a non-statutory clearance checklist, and any failure to deal accurately with the points detailed may invalidate the clearance. For this reason, a non-statutory clearance requires a great deal of work and knowledge regarding VAT legislation.
The work involved in obtaining clearance can be significant, but if material sums of tax are involved and a business requires certainty, it can deliver considerable value to your business, along with peace of mind.
If it appears that HMRC’s view on the matter is incorrect, then The VAT People usually suggests that a reconsideration of the matter is requested. Our specialist consultants have years of experience in drafting this type of document, and our detailed knowledge of the law means we have experience in pointing HMRC to more favourable interpretations that are in the best interest of the client.
In cases where an assessment has already been raised, it is important to handle the process quickly due to strict deadlines that are in place.
Alternative dispute resolution (ADR)
This process is available in some cases of dispute, and can be helpful in resolving disagreements or agreeing the issues that require a legal ruling at a Tax Tribunal. A third-party mediator will assist in exploring how the dispute can be resolved. Our specialist consultants can assist in this process.
The ADR process gives businesses the opportunity to settle certain disputes more quickly and with less expense for both sides. In September 2013, HMRC announced that ADR would form part of their regular business when dealing with small and medium-sized businesses and individuals.
It is important to note that not all cases of dispute would be suitable for ADR; however, the following features in a dispute indicate that the process may be an option:
Where communications between parties have broken down
Where more evidence would be helpful
Where there is scope for a better understanding of facts between parties
In cases where a resolution can not be reached in any other way, it may be necessary to appeal to a tribunal. This process can be particularly daunting to those businesses with no experience in this area. The VAT People can help by advising or acting as an agent throughout the process. In addition, we would support your business by helping to prepare statements of case.
Speak to us
Our specialist team of consultants is well placed to offer support and guidance if you are involved in a dispute with HMRC. We offer effective, clear and easy to understand advice, and are completely dedicated to helping you find an effective solution.
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