Case Law Corner

Servebet Limited


Penalty - whether 'deliberate and concealed'.
The appellant had claimed VAT on a quotation for prospective works to a commercial property.
HMRC issued a penalty in the amount of £14,773 (75% of the tax in error).
On appeal the Tribunal accepted that the appellant had acted 'carelessly'.  The penalty was reduced to £3,545.

HMRC's attitude to penalties has hardened over the last few years.  The facts of this case are less important than the lesson that t is always worth taking HMRC on over the issue of penalties.
We are currently assisting a number of clients who have received "wrongdoing" penalties.  If you have clients in a similar position and would like a second opinion on how to tackle HMRC why not give OMNIS a call.


N&M Walkingshaw Ltd

What is the value of a car sold by a dealer where the dealer offers on over-allowance on the customer part-ex vehicle?

The dealership contended the over-allowance constituted a discount against the value of new car.


The Tribunal found that over-allowance was in respect of the part-ex vehicle.  No discount was offered on the vehicle sale and as such VAT was due on the agreed sale price.

Mr Ronald Asquith


Mr Asquith sourced tickets to order for a variety of clients.


Customers using Mr Asquith's services paid the face value of the tickets, plus Mr Asquith's 'agency' fees.


The case concerned the value of Mr Asquith's services and whether he had become liable to register for VAT in 1999.


Mr Asquith claimed that his turnover excluded the value of the event tickets themselves.  The Tribunal dismissed his appeal, agreeing with HMRC that Mr Asquith was a principal and should have notified his requirement to register in 1999.


If you need to discuss please call us. 

May 2015
A warm welcome to all our readers to the latest edition of The Eye. 
It's been relatively quiet in the period between the budget and the general election but there has been some interesting activity emanating from the EU which promises more changes to the Place of Supply rules over the next few years.
EC outlines e-commerce strategy

The Commission has set out its long term plan concerning the creation of a single market for e-commerce.


This may be a long time coming but it illustrates that the Commission is now looking to ensure EU and Non-EU businesses operate on a level playing field and reduce some of the barriers of trade affecting e-commerce.


The press release outlines a number of key proposals designed to grease the wheels for cross border transactions an non-EU businesses selling to EU consumers via the web.  Highlights include:


  • A single electronic VAT registration with a common threshold for distance selling (including non-EU businesses);
  • Increased and harmonised consumer protection for online purchases within the EU
  • A pledge to reduce cross border delivery costs;
  • A pledge to increase cyber security; and
  • An ambitious overhaul of the EU telecoms rules.

Full details can by clicking the link below.


Click here for details  

Input tax and pension Fund Management Costs
HMRC have published RCB 8/15 dated 26 March 2015. It sets out the criteria which HMRC consider that employers must meet to achieve VAT deduction in respect of the costs of pension fund management services.


Click here for full details 


New Refund Scheme for Charities

This new notice contains guidance on the VAT refund scheme for palliative care charities, air ambulance charities, search and rescue charities and medical courier charities, introduced by Finance Act 2015 with effect from 1 April 2015.


Click here for details 

VAT on the ground

Mini cab VAT successes


We have recently secured a significant refund of VAT for a London mini cab operator.  This follows hot on the heels of a 11th hour climbdown by HMRC in respect of another taxi client and an 'out of court' settlement.


HMRC's position on VAT accounting for taxi and mini cab operators is out of date.  If you have clients operating in this sector why not give us a call to see if we can assist with reducing VAT liabilities.


HMRC's Green Energy Incentive Scheme clampdown


Landowners are able to secure Renewable Heat Incentive funding for green energy initiatives. Typically, landowners install biomass boilers, geothermal heat source pumps etc and receive subsidies based on metered supplies of energy to their tenants from utilities companies.


In certain circumstances HMRC determine that the subsidy is in fact additional consideration for the supply of energy to tenants.  Additional consideration which contains VAT.


This is becoming increasingly common following the incentivised take-up of green energy .  If HMRC have assessed one of your clients or you need to check whether your clients are affected please contact us.


Assessments, Penalties & Surcharges


A simple plea.  Let us check them for you.  The law is the law and if HMRC make mistakes in issuing such notices they can be removed or reduced.


If we cannot assist in mitigating or removing a charge we won't charge!


If you need to discuss any of the above items please contact Nick or Alan.