Can you rely on a VAT ruling received from HMRC when they have been provided with full information in writing?
You would like to think so wouldn’t you? And in the past, you have been able to.
However, the long standing protection from assessments for deemed underdeclared VAT as a result of incorrect advice or actions by HMRC has been withdrawn. This was commonly known as “Sheldon Statement” protection. HMRC now state that there are some circumstances in which their primary duty is to collect tax according to the statute and it may mean that they can no longer be bound by advice they have given. Despite all the publicity of their National Help Line and Advice Centre, plus the clearance procedures introduced to assist taxpayers with their obligations, HMRC can still renege on their advice! Even if you are fortunate enough to actually get a decision from HMRC (which is increasingly difficult and frustrating) you can’t necessarily rely on it. This is the case even if you have provided full information in writing (as required) and made a comprehensive disclosure of your position.
This makes it even more important to avoid errors and the increased risk of VAT penalties and interest. Details of the penalty regime here
This leaves the question as to whom businesses can rely on for accurate, cost effective VAT saving advice and guidance on getting VAT right? The answer, clearly, is to contact their friendly local VAT consultant…