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Do Not Rely on HMRC VAT Advice

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Newsletter issue - May 2013.

If you are uncertain about whether you can make a claim for VAT you have incurred, or how to treat a certain transaction for VAT purposes, you could try searching the HMRC website for a solution to your query. Alternatively you may ring the HMRC VAT helpline but the adviser is likely to send you a copy of a VAT leaflet which is available on the HMRC website. This may, or may not, answer your query.

If you do get a straight answer out of the VAT helpline, be careful to record what you said, and exactly what the HMRC adviser to told you. This is important as if the advice from the helpline is later found to be incorrect you need to be able to prove you presented the full facts for the reply which you relied on. Even then a subsequent VAT inspection may determine you were wrong all along and charge you penalties and interest on any under-paid or over-claimed VAT.

The courts have recently decided that taxpayers cannot legitimately expect the advice given verbally by HMRC to be 100% correct, and this can include advice given in a VAT leaflet or online on the HMRC website. The only way you can count on advice given by HMRC is to apply for a written ruling known as a 'clearance'. To get a clearance you have to set out the full facts in writing, in a clear and unequivocal fashion.

We can help you with this clearance application, or we may be able to answer your VAT question ourselves.

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