Tick Tock

If you receive a material assessment from HMRC, you should always take some advice to double check the technicalities. There are time limits that HMRC are bound by – and much as you think these would be followed – this is not always the case.

Recently at VITA we had an assessment for a charity of £50k, which on closer inspection, £15k of this was ‘out of time’ and we managed to remove fairly easily.

This is further demonstrated in the FTT decision released a couple of weeks ago, where Conservatory Insulations Northwest Ltd successfully challenged a VAT assessment issued by HMRC on the basis it was out of time.

The dispute arose after the company submitted an Error Correction on 15 July 22, which HMRC acknowledged by way of an automated acknowledgement email. HMRC did nothing with this, and when the agent contacted HMRC in May 23 it was discovered that HMRC had no record of this – so it was logged again 22 May 23.

The key thing here is that HMRC have ONE YEAR from the date of receiving all of the information to process the assessment. So they needed to do this by 15 July 2023, but they didn’t spot this technicality, and the assessment was processed and counter-signed three days late.

The tribunal found in favour of the business on a technically and the assessment was withdrawn!

The papers don’t mention what the error was, but I do still get questions on the VAT liability of conservatory roof insulation. Some companies continue to advertise this as subject to lower VAT reliefs. The devil is always in the detail, so care should be taken to ensure that the products are qualifying insulation material, as we know that many are not.