Challenging HMRC – VAT assessments and penalties


If a businesses has been unfortunate enough to receive a VAT inspection which has resulted in an assessment and perhaps even a penalty what should they do?


With regards to an officer’s assessment the first thing is not to accept it without considering:


– Is the basis of the assessment correct?


Not all VAT officers know all the rules all the time, so assessments can be raised in error.  In addition, was the Inspector made aware of all the facts which could affect their decision?


– Is the numeric calculation of the assessment correct?


An officer is supposed to provide a schedule which breaks down their calculations, this is often not provided.  This schedule is required in order that the amount due can be verified.


With regards to penalties the two main points to consider are:


– A penalty will not be raised if it can be shown that there has been “reasonable care”.


Despite the fact that an error has been made doesn’t mean that it  cannot be demonstrated that the business has shown reasonable care.


– Has the correct penalty percentage been charged and are there any mitigating circumstances?


Again, these factors are often overlooked.


In summary, it is essential that any assessments and penalties raised by HMRC are reviewed.  Chiks have successfully appealed both assessments and penalties relating to the above circumstances on behalf of their clients.


For more information contact the VAT team on 01772 821021.