Option to Tax - A Year to Register!

Option to Tax - A Year to Register!

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This is more of a rant than a question, but HMRC are driving me mad. 

A client started a limited company in October 2014 and bought a couple of commercial properties to rent out. One particular property also included a residential component. The previous owner had opted to tax the premises, which means that he charged VAT on the sale. For this reason, my client also chose to opt to tax the property, to enable them to reclaim the VAT content of the purchase price.

After jumping through numerous hoops with HMRC, the matter is still unresolved. They wanted to see proof of various things, including that the rental agreement includes VAT to be charged, which we provided. HMRC have an extremely poor response time in most cases, but we haven't heard from them for three months now.

The phone number never gets answered, and goes through to an answer machine. They don't respond to our message.

The email address responds with an automated "we'll get back to you within 40 days" message, which they don't!

We've had no response to our letters either.

What else are we supposed to do? Our client is getting very fed up, but we can't physically get hold of anyone at HMRC to deal with the issue. If we ignored their letters for months on end, we'd receive thousands of pounds in penalties. How do they get away with it?

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By DMGbus
20th Oct 2015 13:21

HMRC's problem

If the client has opted to tax and was not a case needing HMRC permission to do so, then "carry on as if opted to tax" is the advice.   If HMRC choose not to react quick enough then that is HMRC's problem, unless there is a VAT repayment claim being witheld.  Better still next time see if a TOGC is qualified for and then there's no input tax recovery delay.

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