In the last few months, there have been a number of VAT tribunal cases where, to put it bluntly, HMRC seems to have ‘gone for gold’ by raising massive VAT assessments against fairly small businesses.
These assessments have usually been raised on the basis of the HMRC officer’s ‘best judgment’ (s73(1), VATA1994), often where accounting records have been lacking in key areas, mainly for cash traders.
Pay before hearing
For disputes concerning direct tax (eg income tax, corporation tax) the tax at stake can usually be deferred until the dispute is resolved, although this is not the case where an accelerated payment notice (APN) has been raised. Under the indirect tax rules (eg for VAT) the taxpayer has to pay the assessment before the appeal can be heard at the first-tier tribunal (FTT).
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