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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have a client who registered in September 2015, but

Customer Question

I have a client who registered for VAT in September 2015, but has been told by the company she contracts to that she could have backdated her registration to April 13 and therefore as she is on a flat rate scheme, gained a fair financial advantage. HMRC have refused to backdate the registration.
Is there any way around this, or to appeal to HMRC?
She is not over the threshold.
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. You can only apply to backdate the registration to an earlier date at the time of actual registration. See paragraph 5.2 of VAT Notice 700/1 here. I'm not aware of a right of appeal given that parapraph 5.2 is quite clear on this. HMRC can impose an earlier registration date but they only normally do that if registration should have taken place earlier. Normally, HMRC decisions based on time limits not being met are not interfered with by tribunals unless there are extenuating circumstances such as illness or HMRC haven't followed procedure. As you will read here, HMRC will normally tell you in the body of a decision letter whether there is a right of appeal. I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
In the letter they have said that if there is further information to consider, to appeal within 30 days.
If we can demonstrate that there was a genuine misunderstanding or error when VAT1 was completed. This was a genuine error - is there any room for manoeuver here do you think?
Expert:  TonyTax replied 1 year ago.
The 30 day appeal period has been missed but, if I were you, I'd appeal anyway and cite your client's misunderstdning of the rules and work pressures. I have to say I don't hold out much hope unless the appeal is dealt with by someone in HMRC who appreciates that not every one understands the rules. The VAT side of HMRC is far less flexible and seemingly more officious than the old Inland Revenue side in my experience.
Customer: replied 1 year ago.
OK, will do. Thank you
Expert:  TonyTax replied 1 year ago.
Thanks.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Do you mind if I just ask whether there are any pitfalls in backdating VAT registration? It seems a win win situation, but is there anything we should be aware of?Thank you again
Expert:  TonyTax replied 1 year ago.
I can't think of any in your client's situation. Her main contractor clearly has no issue with paying the VAT as it will reclaim it. Sometimes, customers refuse to pay backdated VAT and so the person charging it takes the hit.