VAT - Refusal to Register

VAT - Refusal to Register

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Stuff like this is why it is easily possible to slash numbers at HMRC and slash the backlog at the same time.

I applied online for a client's registration on 14 Feb, straightforward stuff.  Transfer of a going concern of a restaurant business, my client is a partnership. Back came some paperwork, VAT 5 and VAT 2.  Annoying given that they asked for information we'd already given in the original application, but I sent it off.  My client later sent it off too not realising I had.  Then 2 weeks later they asked for the same info. again.

Very annoying, but my client sent it off again.  Then 2 weeks later they rang me to ask for it yet again.

Very very annoying.  I explained we'd already sent it 3 times and offered to give her any information needed right there and then by phone or e-mail, she refused.  I gave her some free information:

1.  Our first return will be a reclaim due to capital spends.

2.  After that sales should be £200k a year or more, all at 20%, with mostly zero-rated food inputs.  So a cash cow for the country.

Still she would not budge.  I said I was not prepared to send the same information a fourth time.

So now we get a Letter of Refusal to issue the VAT number.  I have written today to the head of the office concerned highlighting the history and suggesting he or she reconsiders this refusal for the good of the country's finances.

Where do they get their staff from?  Wherver it is, can they send them back and start over again please?

Replies (12)

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By mikewhit
04th Apr 2012 22:03

Ask them to trace your documents
Give them the dates of posting and tell them that since personal,commercial and private data and details are at stake, you are concerned there might be a data protection issue and you might be required to contact the Data Protection commissioner.

And do so, if no joy.

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Chris M
By mr. mischief
04th Apr 2012 22:24

good idea

Good idea that.

My client has decided to take them at their word and focus on making profits, then register after £77k of takings.  I sympathise, there are more important things when you've just bought a Lake District restaurant at the start of the season than endless HMRC forms.

But somehow I suspect in 5 months time when we pass that marker they'll have the bare face cheek to harrass us for late registration and just want to be as confident as possible that if this goes the distance to Tribunal we can absolutely show we did everything which could reasonably have been expected of us.

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By User deleted
04th Apr 2012 22:55

Was previous restaurant VAT registered?

If so, I thought you were required to register from day 1, and not at the registration threshold!

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Chris M
By mr. mischief
05th Apr 2012 05:50

Yes!

Yes it was a Transfer of a Going Concern.  That is why I applied online on the very day the purchase completed, and have been sending off these forms to them.

But they have now turned around and refused our application for a VAT number!

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By shaun king
05th Apr 2012 10:14

TOGC

If you do not pursue the registration then the vendor would have to charge you VAT on the sale price. Was it included in the warranties and indeminties etc that your client would be registered for VAT at the date of transfer in order tha it could be treated as a TOGC.

I think you will need to go back to HMRC and sort this out otherwise there will be bigger problems in store if the vendor is assessed for VAT on the sale proceeeds as it will not be a VAT free TOGC.

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By ireallyshouldknowthisbut
05th Apr 2012 12:46

Have you spoken to them? I am wondering if the reason for the rejection is that there have 2 or 3 applications on the go,and the rejection is for one of the applications, but there is still a live one?? Just a thought.

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Chris M
By mr. mischief
06th Apr 2012 03:57

Yep

There is one application on the go.  I spent over ten minutes on the phone to them 2 weeks ago.  See my original post - I was giving her free information to make it crystal clear to her that this business will be a Treasury cash cow from its second VAT quarter onwards.

So just to be clear:

1.  I completed an accurate error free online application to register.

2.  I have posted off forms as requested.  These forms are VAT2 and VAT5, not applications to register.  No information is given on these forms they do not already have.  Any information they are lacking I offered over the phone to either give them over the phone there and then or by e-mail to an e-mail address of their choice, given that the postal method had gone astray.

3.  My client has posted off forms twice, some the same as the ones I posted.

4.  I have spent over ten minutes on the phone to them explaining things in detail.

5.  I have now written to the Office Manager of the tax office concerned to see if he or she wants the net £9k which is my estimate of the net VAT which will be paid in the first two quarters before we go through the £77k and then apply again under the threshhold rule.

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By ShirleyM
06th Apr 2012 07:45

Do they give a reason?

I have never been in your situation but wonder why they have refused. Did they give a reason, and if not, did you ask for a reason?

I can't see any genuine reason other than the clients defaulting on VAT in the past but in those circumstances I understood they ask for a hefty deposit rather than refuse registration.

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Chris M
By mr. mischief
07th Apr 2012 06:50

documents

They claim they've not had the documents we've sent three times.  Given that I offered to supply any information needed which had not got there in the post by phone or e-mail and they refused, they are in my view just being complete jobsworths.

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By ShirleyM
07th Apr 2012 08:58

Online!

We have done a few online with no problem, but any Flat Rate/Partnership forms have to go by post (unless I have overlooked a way of doing them online).

Must admit though, that if a partnership or Flat Rate we tend to post the forms together to try to prevent mixups at HMRC end. Maybe this is what happened.

I wouldn't let it lie. I would escalate the problem, but I appreciate your clients wishes need to be considered first as long as they are aware of the VAT now payable on the purchase and still prefer that approach.

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Chris M
By mr. mischief
07th Apr 2012 18:46

Registered!

Today we get the registration certificate!  All round the houses, public funds wasted to no good purpose.

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By ShirleyM
07th Apr 2012 22:59

But a good result in the end

Thanks for keeping us updated :)

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