Reduction reduction for hospitality

[binny]

Dear Sirs,
I just attended a VAT inspection, and the VAT inspector made the following statement.
As the till was not adjusted to the 5% and 12.5% rate during the period of reduction, then all income pertaining to those periods would have to be assessed at the standard rate rather than the reduced rate.
He is therefore going to assess all the sales at 20% standard.
Does anyone have any experiences of this or gone through the same issues and can you provide any advice. I can see a lot of small retailers falling into this trap.
Regards
Aubyn

[wamstax]

Unfortunately what the VAT officer said is the HMRC practice. If you were able to issue a VAT credit note to the buyer you could have got round this practice but given your comment about small retailer I think this is unlikely.

Added to the expectation by HMRC that you will account for the higher of the VAT due and the VAT actually charged they might ( depending on the facts of each case ) consider that penalties should also be charged for careless or even in worst scenario deliberate behaviour along with interest on the VAT evaded

[binny]

Thank you very much