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bigduckontax, Accountant
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Dear sir/madam, this is a copy of the letter my partner received

Customer Question

Dear sir/madam, this is a copy of the letter my partner received from HMRC. It arrived out of the blue and having read it was quite horrified to see the amount of money being asked to be returned, money she hasn't got and in reality never actually had because it was taken up by debts owed from the business. which left her with a £15000 debt which she is paying off per month as we speak. 50% of the liability is Punch Taverns and they at the moment have agreed to to do that, Jacqui's problem is she is liable for the whole amount which is would be impossible. and would bankrupt her which could cost her, her job not a good situation.
VAT assessment for accounting periods 00/00 BULK ASSESSMENTS
Your business was de-registered from VAT sometime ago
Following a claim for overpaid VAT on gaming machine takings we made a payment to you on 18 March 2011 & 4 April 2011. We made the payment following court decisions in the litigation involving Rank plc, but following more recent decisions of the UK courts and as outlined in Revenue brief 01/14, it has now been established that no liability for payment by HMRC existed.
When we made the payment we issued a protective assessment under S80(4A) and S78A of the VAT act 1994. We now require this some to be repaid
The assessment was made up of the following amounts, including statutory interest
What the protsctive assessment is made up of. Amounts now due to HMRC
Tax £4,693.00
Statutory interest £698.00
Total amount of tax and Statutory £5,391.00
Default Interest
You were advised that HMRC would require interest on the amounts set out above.
Default interest is due under section 74 VAT Act 1994, and assessed in accordance with section 76 of the VAT Act 1994. Default interest in the sum of 323.21 is therefore also assessed as being due from you for the period 3 September 2012 to 2 September 2014.
Please pay the tax, statutory interest and default interest amounts detailed above immediately.
Total amount due to HMRC is £5,714.31.
As a footnote I would like to add it is not the intention to avoid the debt but feel that it has been dealt with unfairly and with no apparent redress. The 3rd of September 2012 was a year after Jacqui left The New Inn and 2nd September was a further two years without any correspondence making it a full three years after leaving The New Inn.
I would be very grateful for any advice you may be able to offer.
Andy Spivey
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello Andy, I'm Keith and happy to help you with your question.
Unfortunately, HMRC will adopt the not unreasonable approach that as your friend has received the money, albeit in error, why can she not repay it? Unfortunately Jacqui is piggy in the middle following a Court ruling that VAT was not due hence the refund, followed by an appeal which reversed the original position. The fact that all her business income was absorbed by Punch is, unfortunately, outside the scope of the matter.
Your only way forward is to negotiate with HMRC with a view to arranging a recovery schedule which will satisfy both parties. Of course bankruptcy might actually help as the Punch Tavern and indeed all other debts would be cleared in the event of a bankruptcy and her only reimbursement would be to her trustee in bankruptcy at an amount agreed by the Court.
I am so sorry to have to impart such gloomy news and rain on Jacqui's parade.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3371
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.
Customer: replied 2 years ago.

Thank you for your advice,I must say it is much along the lines I expected. Just to clarify a point really on a personal level Jacqui is not not in debt to Punch Taverns but in debt to the bank because of Punch Taverns unreasonable practices which finally forced her to leave the pub. On paper Jac ran a very successful business sadly very high rent and top prices for beer finally took it's toll.

Thank you again.

Andy Spivey

Expert:  bigduckontax replied 2 years ago.
Delighted to have been able to assist, Andy.
Sorry to have slightly misunderstood Jacqui's precise position.

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