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Surreal call with HMRC VAT Annual Acc. Scheme team

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I have a limited company where the director and only employee is me. I’m registered to pay VAT since the 2016-2017 accounting year being enrolled on the VAT Annual Accounting Scheme from the very beginning. I have no debts with HMRC.

A few days ago I received a letter from HMRC claiming the October and January quarterly payments of my VAT Annual Accounting Scheme. I didn’t receive the letters notifying me about the quarterly payments –as most of the quarters since I’ve been in the Annual Accounting Scheme for the last 3 years–. This lack of notification letters wasn’t a surprise though.

The issue comes from the fact HMRC applies rules in an arbitrary way that it’s not always in the way described publicly: on my 2017-2018 VAT accounting year finishing June 2018 I didn’t receive any of the quarterly notifications to make the payments. I was worried about this lack of notifications and I called HMRC in June 2018 to ask whether this could be a problem. I was told this was not a problem as long as I made a big lump sum payment before the end of August with the corresponding amount for the whole VAT accounting year. So I did and everyone was happy.

For the 2018-2019 year after receiving the February letter it seems VAT rules for me have to apply again as “publicly intended”. That’s OK. But I’d like to understand these criteria changes on the HMRC mood. I called the VAT Annual Accounting Scheme departament (0300 322 7873) to try to solve these doubts:

  1. Why I haven't received the quarterly notifications as stated on the HMRC website (https://www.gov.uk/vat-annual-accounting-scheme/return-and-payment-deadl...): HMRC will write telling you when your instalments are due and how much they’ll be.
  2. Why in my previous VAT accounting year I was allowed to pay my VAT in one single payment.
  3. Why the amount of my quarterly payments due is calculated with the estimated figure I made the first time I paid VAT if I’ve already paid 2 years of VAT and, according to the website (https://www.gov.uk/vat-annual-accounting-scheme/return-and-payment-deadl...), the quarterly VAT estimations should be done taking into account the amount I paid last year rather than the first-time estimation: The amount is based on previous VAT returns (or estimated if you’re new to VAT).

The woman that assisted me was only able to reply the first question: I simply shouldn’t trust the notification letters and just pay on every corresponding quarter. Amazing. Now I only had to guess how much is it. The website says it should be quarters of my last VAT year. HMRC instead is claiming me quarters of the initial estimation I made almost 3 years ago.

The woman was unable to answer the second and third questions. And here is where the call turned bizarre. The woman told me she was gonna consult my doubts with someone else. She put me on hold and after 5 minutes she came back. But just after I heard her grabbing the phone/headphones the call suddenly dropped. Damn telephone lines! How unfortunate I am. I had to call again, wait that annoying HMRC automated voice system for 15 minutes and then someone finally said “hello”. I was lucky, it was the same woman than before, a departament so specific cannot be very big! I won't have to tell the whole story again. My luck just lasted a second though. As soon as I replied “hi” the woman noted I was the same person than the previous call and then… …She talked to someone “it’s the person from earlier… What do I do?”... “inaudible words from a man”. Then the woman left the phone/headphones on top of the table and carried on typing on the computer. For 10 minutes. Then she dropped the call.

I couldn't believe what just happened. This woman blatantly blanked me. I was both furious and afraid. Furious because before a normal call from someone who had legitimate doubts I was treated in this appalling and disrespectful way. And afraid because my doubts are still unresolved, and given that this departament seems small I don’t know if someone else different from this woman could help me. It seems that, sometimes, automatic computer systems at this state agency make money claims, and if proven erroneous no human on HMRC knows why they were made nor where the money figure is coming from.

Hence I’m writing here as it looks it's the best place outside HMRC to get some information that could solve any of my 3 doubts. Is this a situation that someone has experienced before? Any extra advise and comment will be very appreciated, thank you.

 

Replies (6)

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By Matrix
04th Mar 2019 20:11

I only have one client on the annual accounting scheme and I never knew that HMRC sends reminders.

I just give the 3 quarterly payment amounts based on last year’s VAT, then the final amount.

Provided you have paid those amounts then you will be fine. HMRC will never give you an explanation of what went wrong.

And enjoy the fact that you have nearly 2 years until your first MTD return.

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By Cheshire
04th Mar 2019 20:27

Best place to get some answers is from your Accountant who can explain how the process works.

if you are too tight to pay for an Accountant, then start your info search here
https://www.gov.uk/guidance/vat-annual-accounting-notice-732#instalments

Although be aware that HMRC guidance is just that....guidance, not law.

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Replying to Cheshire:
Quack
By Constantly Confused
05th Mar 2019 10:08

Cheshire wrote:

if you are too tight to pay for an Accountant, then start your info search here
https://www.gov.uk/guidance/vat-annual-accounting-notice-732#instalments

If you're so rude you need to make comments like that please limit your posting to here
https://www.mumsnet.com/Talk/active-conversations

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Replying to Constantly Confused:
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By Cheshire
05th Mar 2019 15:04

Rarely do I get annoyed and then I just say what I think, some perhaps think its a tad rude, but its only usually after getting stuck in my car behind someone who is driving in the right hand lane for 300m up a hill when the left hand lane is empty ;P

I could view your comment of posting on mumsnet a tad rude, or just completely sexist, but it water off a ducks back.

I did think the post the other day calling another poster a F U C K W I T was a little bit ruder than my comment here, although funnily enough no-one picked up on that, even got a 'thank you' from the person it had been directed towards.

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chips_at_mattersey
By Les Howard
05th Mar 2019 11:30

I like Annual Accounting! (It also defers your joining MTD, so cant be all bad.)
Your year making nil interim payments has been the problem. That is not the norm. HMRC will ask for quarterly or monthly payments in most cases. The HMRC Notice explains that, or your Accountant should assist.
And why should you expect HMRC staff to understand it either?

What to do - I would always review the interim payments that HMRC request, and have them changed if necessary.

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Replying to leshoward:
Tornado
By Tornado
05th Mar 2019 17:53

The more complex Tax gets, the fewer the number of people who understand it. (Particularly HMRC staff).

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