A few months ago we registered a client for VAT using the online service. The plan was they would start on the standard method of VAT and then join the Flat Rate Scheme after the first return. Unfortunately, we put the request to join the scheme on the online form and clicked submit. Realising the mistake immediately we called HMRC, told them what had happened and they agreed to sort. A week later we got a letter confirming withdrawal from the Flat Rate Scheme and that the client couldn't join again for a year. "Hang on!" we said. "They've never been in the Flat Rate Scheme. We told you it was a mistake on the form - and you never told us this was how you would sort it out."
We then got a letter saying that if the client wished to apply again they would consider it. Of course, the client has applied and HMRC are now saying "no" not for 12 months.
There are a number of problems. Firstly, it has proven impossible to actually speak to anyone other than a helpline person. Secondly, HMRC are taking an age to respond to letters. All the delays are working against our client.
We are in the process of asking for a decision review on the basis that:
1. we informed HMRC immediately of the mistake on the online form.
2. had we been told on that phone call that they were not amending our application but treating it as a request to withdraw from the flat rate scheme we would have requested to stay in the scheme.
3. the client has never been on the flat rate scheme. No FRS returns have ever been prepared.
So, am I alone in thinking HMRC are being unreasonable here? Or is it a vote for abandoning online submissions in favour of something you can fish out of the post tray?