HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Thursday, 20 September 2012

JJB Sports Under HMRC Investigation

JJB Sports, the retailer of choice for some of last year's rioters, is facing troubled times. It is currently under administration and now, according to the Telegraph, facing an investigation by HMRC.

HMRC are looking into allegations that the company wrongly charged VAT on children’s clothing, including Manchester United and Liverpool FC replica football kits. Tax is not applied to children's clothes.

These errors are understood to date back over a number of years to 2006.

In its annual report JJB Sports referred to a £5.3M provision associated with HMRC, relating to “a non-recurring matter which the group is currently discussing with HMRC”.

Given that the VAT should not have been charged, it seems unlikely that the £5.3M figure relates specifically to erroneous VAT on children's clothes.

However, if there is a VAT dispute with HMRC (relating to other matters) then it is possible that there is a "discussion" going on between HMRC and JJB over exactly what is owed to HMRC wrt VAT.

Tax does have to be taxing.

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  1. Don't know what JJB have done about the VAT charged, but if a company charges VAT when they should not have, as long as that company passes the VAT on to HMRC...?

  2. How on earth will JJB be able to track down all the customers who shouldn't have paid vat?

    1. They won't, they might (I guess) advertise for people to come in with the receipts for a refund (if the receipts are sufficiently detailed) ....or they will simply keep the excess.

    2. Mmmm..., let's get this focussed then;

      JJB charge Joe Public (customer - real!) tax on goods which should not have been taxed

      JJB then, presumably, pass on the tax to HMRC who gladly accept it

      Then, error/mistake or whatever being discovered we expect them to reimburse Joe Public for the tax collected

      OK, what about the tax paid over to HMRC then?