Doing it wrong!
Did you know that HMRC can impose a penalty for issuing an invoice showing VAT when it is not due? This can happen where the business is not registered for VAT, but issues VAT invoices as if it were.
HMRC require the trader to repay any VAT erroneously charged and impose a penalty of 10% to 100% of that VAT. This can be a very large sum, as Ms Foy discovered when her company was hit with a penalty of £57,768.
Foy formed her company in November 2012 and applied online to be registered for VAT from 1 January 2013. However, the taxman had some questions about the application so called the mobile number given, and left a message for Ms Foy. He also sent a letter and email to Ms Foy, neither of which she replied to. In spite of not receiving a VAT number the company charged VAT on its invoices until August 2013, when it applied again for a VAT registration.
Ms Foy’s experience should be a warning to anyone who thinks they can ignore letters and phone calls from HMRC. When applying for VAT registration it is essential to include address and telephone details where you can be reached.
We can deal with HMRC’s correspondence on your behalf, but they will not always copy us in to important letters, so please tell us about any HMRC letters or calls you receive.
