You know that the government is strapped for cash when the rules of the game are charged wrt tax reclaims.
New rules introduced by HMRC, effective from April 2009, will mean that even if a business wins a claim in a VAT Tribunal for overcharging it may not be able to reclaim its legal and accountancy costs from HMRC, unless it can prove that HMRC has acted unreasonably.
Proving that HMRC acted "unreasonably" will be tough.
This effectively means that small firms will not bother to try to reclaim overpayments, unless they are excessive.
Is this fair that small firms are being disadvantaged in this manner?
No.
However, small firms are easy targets; especially when a government is broke.
Tax does have to be taxing.
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