vat civil penalty

[jimbo1]

Hi

VAT raised an assessment following a control visit under PN160 (dishonesty). The business is a take away shop that was sold subsequently. The reason they quote for the civil penalty is because "the owners concealed the actual number of z reports during the course of the week and thus the till was reset to zero a number of times before the retained z report obtained". According to them this was discovered by interrogating the cash register during their visit. The owners say they did not that and they say this may have been caused because the till was bought second-hand - they also say that the VAT officers did tamper with their resister.

I am not sure if the VAT man has exceeded their powers by this. I am aware of course that they have a right to request reasonable information and the production of specified documents. From reading the correspondence and notes of meetings it is not obvious that the VAT have exceeded their powers or they acted improperly in any way.

The undeclared vat with the civil penalty exceeds £150k in this case, so it's a very significant amount. The case has been referred to the Tribunal, which is asking from payment of tax to allow hearing.

Any ideas or advice from someone's previous experience as to how to proceed and defend the claim (if of course there are ground to defence)?

Many thanks.

[wamstax]

Unfortunately it is unlikely that they exceeded their authority and as long as it was a till specialist that interrogated the till their is a fair chance that their conclusions could hold water - but might still be exaggerated.

Basically you need to get hold of their report workings showing how and why they came to the conclusion that they came to. Additionally you really need to ge t a copy of the till manuals (there is normally an operators manual and an engineers manual). OK so the VAT and penalty are sizeable BUT how reliable are the clients? I recall having one set of Z till slips that looked absolutely prime and reliable and matched the accounting records exactly throughout the whole year. Too good to be true and yes it was...... somebody had rerung a whole years till rolls (using crafty modus operandi) and a story about a faulty counter (with mechanics report) and it only took them about 5 and 1/2 hours. Needless to say that was in my other life and the accountant was absolutely gobsmacked when he realised what a paid of fraudsters his clients were.

It does need a very careful review before you decide whether the case is worth fighting in the manner that you clearly have gone down for as you say the tax can be payable and the penalty could go higher. What are your clients going to do regarding your fees if they lose or are they covered by a Investigation cover policy.

if you would like to have a short chat please feel free to contact me
bill@wamstaxltd.com
www.wamstaxltd.com

[wamstax]

Of course it is only by a complete review of everything from day one through to the making of the VAT assessment and penalty determination that you could decide if they had done anything wrong.

You would also need to know exactly what transpired when the VAT man was at the premises examining the till(s) and whether any notes were taken and provided of the meeting events and matters discussed. If you were not present then how can you consider matters if you don't have notes of meetings etc. Gather all the information necessary and then consider matters. You might also consider making a Data Protection Act request although that could (and probably would) take up to 40 days before your client would get the information. Of course you would have to watch that HMRC would not be compelled to provide any documentation or information that could jeopardise any tax enquiry. remember that if it is going to Tribunal they are bound to provide you with everythign that they intend to rely on as evidence etc so that there is no reason that you need to be shy or bashful in your requests.

regards and hope that this helps
bill@wamstaxltd.com
www.wamstaxltd.com