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£10.5K VAT Issue Resolved

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£10.5K VAT Issue Resolved

One of our clients neglected to register for VAT despite
breaking the VAT threshold, although we had advised them to register.  This
was a genuine oversight by the client who fell ill shortly after our advice 

HMRC launched an investigation to ensure that the client
registered for VAT and paid any amounts due.  We did advise them that the
effective time for registration was only a 9-month period and therefore they should
have registered and then de-registered later on within the same tax year.

HMRC then raised an assessment of £10,638 based on VAT that
was due less 5% estimate to recover input tax.  From here we took two
courses of action; the first was to appeal against the 5% input tax recovery
and evidence that this should be nearer 15%.  We then contacted the person
that he worked for and agreed with him that our client would issue a VAT only
invoice which was then paid (this did not affect his client as they were VAT
registered).

The outcome was that our client only had to cover £135.96 of
the original assessment of £10,638.

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