Official error: A major UK accountancy firm recently got its hands on some interesting statistics from the tax man. During the 18 months to October 2010 the VAT Internal Review team considered nearly 29,000 appeals against penalties they ahd issued for incorrect returns and late payments. In around 50% of these cases the charges were cancelled because they had been wrongly imposed. Wrongly charged: The statistics are worrying, especially when you consider that the penalties were overturned by the taxmans own review team, which is likely to be biased in his favour. In most cases the penalties were cancelled because the mistakes made by businesses in their VAT returns weren't as a result of carelessness but rather a genuine error. In this situation the rules say that the taxman shouldn't charge a penalty. Tip: Don't take a VAT penalty lying down. Where there's a penalty for an error on your client's VAT return, but it was due to a simple mistake and not because you had acted carelessly, ask for an internal review of the case. The next step: see http://tax.indicator.co.uk (TX D 11.22.08) With thanks to Indicator Ltd |
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