the service level of HMRC has fallen to such an extent that recently it has taken me days to get through to them. Example: we applied to take a client off the VAT Flat rate scheme but the letter advising us whether that had been actioned never arrived. We tried for over a week to contact HMRC because we did not know what form to report in. Each time we tried we got to the end of their silly questions and dialog only to be told "we are very busy right now etc. etc." Result - we reported late. I am of the opinion that HMRC should accept an appeal on the grounds that they caused the late submission. Would welcome any input from colleagues.
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I don't understand your example
You wrote to HMRC advising that the client wish to be removed from the flat rate scheme.
Presumably you mentioned a date from when this applies from?
You should, therefore, have prepared the VAT Returns from that date on a non-flat rate basis.
I would never wait on HMRC approval for something like this.
Mainly because it will probably never arrive.
Just state the facts on a letter and proceed on this basis. If there is ever any challenge from HMRC you produce the letter which you sent in and make them go away.
Appeal?
You can't appeal against a Client coming off the FRS if he is statutorily required to do so. You can appeal against a resulting penalty assessment on reasonable excuse grounds if the error resulted directly from HMRC action or inaction. Similarly, a Default Surcharge appeal might be successful on those grounds.
Filing deadline does not change
I agree with JCresswellTax that you won't get a response from HMRC on a letter like this. You do not need approval to revert to normal accounting for VAT. In fact, HMRC cannot block you from leaving the scheme either. Good to have on record a letter informing them of the fact, but the choice to leave is your client's.
I don't understand how this came to cause a delay in filing anyway. Did you "apply for removal" close to the deadline? Say you had just prepared a return and decided FRS was no longer worthwhile. That is another three months until the next return is due. Longer if you prepared the figures for the fateful return in advance of the deadline. Even if you were expecting a response from HMRC, leaving it until the last week to follow-up is just careless.
You could have submitted a return on time, using whichever method you considered appropriate (though in reality normal VAT accounting was appropriate). If HMRC queried it later, you had your letter to them as proof that you had given notice of leaving the FRS. Instead, you chose to file late. But what penalty are you proposing to appeal anyway? If this is a first default situation, there is no penalty as long as you don't default again within 12 months. If not a first default, then not ensuring this was dealt with promptly seem even more foolish.