Wednesday, 14 December 2011
HMRC Beats The Retreat
I see that HMRC has had a run in with Danielle Forster, a farmer’s wife, which has caused HMRC to "beat a retreat".
Mrs Forster of Parsonage Farm, Arkesden, has successfully won an appeal against an HMRC decision to end a long standing practice (over 40 years) and combine her B&B business with the farm for VAT purposes.
She has been exempt from VAT, because her turnover is below the £73K threshold.
However, following a recent visit by a tax inspector, HMRC had ruled that the separation was artificial.
The Telegraph quotes CCH Fee Protection, who fought her case, which described the decision by a London VAT tribunal as ‘ground breaking’ and said HMRC had “beaten a retreat” in another similar case.
Glyn Edwards, CCH’s VAT litigation specialist, said:
“HMRC should never have taken the case this far and defend what proved to be indefensible.”
HMRC (using the "C" word again) said:
“HMRC applies the rules fairly and consistently in all cases where we believe that a single business has been artificially separated to ensure that the right amount of VAT is paid on all taxable supplies.
HMRC makes decisions based on the facts related to each specific case and where a customer disagrees with that decision they can take it to a Tribunal for independent review.”
Why did HMRC change its opinion of the business after 40 years of accepting that it was separate from the farm, did the "facts" really change (clearly not, based on the tribunal's decision) or was it due to a change in HMRC's "perspective"?
“HMRC should never have taken the case this far and defend what proved to be indefensible.”
HMRC (using the "C" word again) said:
“HMRC applies the rules fairly and consistently in all cases where we believe that a single business has been artificially separated to ensure that the right amount of VAT is paid on all taxable supplies.
HMRC makes decisions based on the facts related to each specific case and where a customer disagrees with that decision they can take it to a Tribunal for independent review.”
Why did HMRC change its opinion of the business after 40 years of accepting that it was separate from the farm, did the "facts" really change (clearly not, based on the tribunal's decision) or was it due to a change in HMRC's "perspective"?
Tax does have to be taxing.
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An exercise in pure logic. Q8 in form P35 asks you to insert a letter. You do not know the solution.You cannot phone a friend because HMRC won't answer and the computer link is down again, you write aletter to them Logic: it is one of two or more letters between a-Z. You enter a letter, Basic Tools tells you WRONG and you cannot complete the return. Logic, the answer is between a& z -1 (or the machine is broken) options, you can change the letter, Do so- WRONG and you cannot complete the return. You repeat this through 25 Letters of the Alphabet. Logic: Basic Tools must already know the answer as there is no choice between any letter (or the machine is broken) Enter letter 26 Wrong. Logic: the answer is not a letter and the machine already knows the correct answer, thus HMRC are not seeking information, just trying to trip you up. Now fast forward 5 months and you get the answer from HMRC that the space should be left blank, thus they are asking you a question to which they already know the answer, which option is concealed from you. And the best bit. Once you have entered a letter you can only change it you cannot return to a blank.
ReplyDelete@15 December 2011 08:40
ReplyDeleteI know.... it's really annoying when HMRC asks for facts that you should already know isn't it.
If it's an exercise in pure logic and you fail then I am left wondering how this is HMRC's fault? Or is an employer not being able to count to 26 yet another failing of HMRC?
For once I think HMRC has a point. A Farmer operating a traditional farm and supplementing the income from B+B activity. Both businesses running from the same premises by the same people. It is one business. So 40 years ago it was decided to treat it as two businesses, but VAT law has changed over 40 years and HMRC are entitled to review their position. I think this isa clear case of disagregation.
ReplyDelete