An interesting FTT case concerned whether NT ADA Ltd should be allowed to continue its appeal against a VAT assessment without payment of the £2.2m assessed.
The company is associated with NT Advisors, which had been involved with tax avoidance schemes. This was admitted in the notes to its Accounts, quoted in para 17 of the decision.
The company had failed to notify its liability to register for VAT on time. In fact, it was eight years late in registering for VAT. The assessment for £2.2m was raised in January 2017. Company Accounts indicated that, at 31 December 2016, it held £3.3m in net current assets. In subsequent years the company transferred most of this money out of the company to its controlling Director, as part of a restructure.
The company must have been aware, during the period of restructuring, that it had a liability to pay VAT, even if it was disputed.
The Tribunal was not impressed!
The Tribunal concluded that the company had put itself in the position of being unable to pay the disputed VAT. It therefore refused the hardship application. In simple terms, of the company wishes to continue its appeal, the controlling Director will have to re-invest the money he has taken from the company.
The decision is here: http://www.bailii.org/uk/cases/UKFTT/TC/2019/TC07161.html
About Les Howard
Hi, I am a VAT Consultant, working mainly with charities. I am based in Cambridgeshire
I have over 20 years experience in VAT, and am currently also a part-time member of the Tax Tribunals.