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The dangers of advising on VAT when you're not an expert
By all accounts this seems to be a case that will result in a negligence claim being made against the 'professional' referenced in this quote above:
"Cheruvier had not registered for VAT purposes not because of an intention to avoid the tax, but because she had been advised by a professional that her supplies were exempt from VAT, the tribunal heard".
For such a claim to success the professional will need to have owed the lady concerned a duty of care. If she simply asked a friend of a friend and/or did not present all of the facts honestly the professional may not be liable.
And, as ever, whether the insurers pay out will depend on whether the 'professional' had complied with the terms of their policy. For example, did they disclose the challenge by HMRC and the fact that this was going to the tribunal/court as a circumstance that could lead to a claim?
Mark
I would interpret 'Professional' to mean that the appellant sought and paid for advice, and relied on that advice when conducting her VAT affairs. If she had gotten advice from a friend or someone else not not qualified, the court would surely have said so. I would echo the first responder, I hope the Professional is adequately insured.