The case involved Ryan Flood (TC8024) who was trading as a ‘Snack in the Box’ franchisee, providing confectionary and snacks via vending machines. Flood registered for VAT on a voluntary basis with effect from 8 August 2014.
His first return was for the period to 31 October 2014. This return, and the one which followed, showed a repayment position, largely due to the acquisition and running costs of a van.
HMRC subsequently contacted Flood to say they intended to carry out checks to his first two returns. Flood spoke to HMRC and provided his records and these checks were both concluded by 20 April 2015. HMRC disallowed part of the VAT reclaimed with regard to the van on each return.
Flood later notified HMRC that he would be cancelling his VAT registration. As he was, and always had been, trading below the VAT threshold, HMRC agreed to cancel his registration with effect from 26 June 2015.
A final return was issued but was not submitted at that time. In the absence of a return HMRC assessed Flood for £301 and contacted him regarding the penalty position following their amendments. Flood appealed the penalty but HMRC upheld it and confirmed the amount due as £3,421.
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