VAT Assessments query

Can some of you VAT experts out there help please.

A client has been in default of submitting VAT returns for nearly 4 years. They have a huge assessment built up which they are about to pay to the bailiffs.

If I bring their affairs up to date and get all the outstanding VAT returns submitted, can the actual VAT due be substituted for the amounts actually assessed. I appreciate that there will still be penalties, interest etc. But because the assessments have been increasing they are very likely to be in excess of what was actually due.

I've looked at Notice 700 and can't find the specific answer and the search facility on HMCE site is currently down.

Thanks, David Floyd

Reply to
David Floyd
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Yes the figures are set in stone, but it doesn't matter what the rules are, things have moved outside into the "real" world, you have a VAT inspector who wants a result and you have solicitors who don't know anything about VAT.

In our case things were (happily) further complicated by the fact that our client had paid some assessments but not others, and had submitted some VAT returns but they were complete nonsense.

So the method was;

1) The bailiffs are looking for an amount. Ask them to provide analysis of that amount.

meanwhile:

2) Get analysis of the client's VAT history from the Inspector.

Go through both sets of figures. A few things will be wildly wrong, attack the wrong things and at that point the solicitors must withdraw the bailiffs.

Then you offer the Inspector a deal, You will go through the books and work out what VAT should have been paid. Any of the "wrong things" that in your client's favour you leave in, after all how are *you* to know what they are, anything else must be taken out unless they can justify them.

Came to about £2,000 and everyone was happy.

Reply to
Troy Steadman

because *you* went through the books, d*****ad

do the figures correctly and pay what's due, plus penalties and interest.

get it right first time and no-one will be able to sue you for following troll's advice

Reply to
DoobieDo

In message of Wed, 29 Sep 2004, DoobieDo writes

Not when assessments have already been issued and the bailiffs have been last week and are due back this week to take assets if not paid in full.

DF

Reply to
David Floyd

In message of Wed, 29 Sep 2004, Troy Steadman writes

Etc.

Thanks, Troy. I've taken that on board along with other advice from a colleague.

David Floyd

Reply to
David Floyd

If someone send the bailiffs round to your premises asking for £35,328.67 (or whatever) you are entitled to know what that number comprises. If we are talking about Customs and Excise then in my experience they will no be able to tell you what that number comprises.

Even if they have a full printout of the last four years, somewhere back there will be a B/Fwd figure from the old system, whcih there is no way of accessing.

Ermm, it's a bit too late to "get it right first time" Dave, we are dealing with the present, damage limitation.

Reply to
Troy Steadman

you've either answered your original question or still know nothing of the workings of the assessment system... we'll leave you to decide which

Reply to
DoobieDo

The more I read of your stuff the more I despair. No C&E assessments are set in stone.

If the "huge assessment" is made up of central computer-generated assessments (in the absence of returns), submission of the returns will automatically replace the central assessments and any debt will be recalculated. If the returns don't look credible, they might generate queries, but you can cross that bridge when you come to it.

If an officer has looked at the records and issued "additional assessments" (ie assessments over and above the central computer-generated assessments to bring the central assessments up to amounts that look to be closer to the truth), details should be available. But there's no indication above of officer involvement in the assessments.

In either case there's no right of appeal as such against central assessments or additional assessments. They way to get them rescinded is to submit the outstanding returns.

If there are additional assessments involved and the returns are submitted for lower amounts than the central and additional assessments combined, the returns won't be accepted until someone has looked at them. But if there are no additional assessments involved, the returns will normally automatically replace the central assessments.

Any surcharges will automatically be recalculated on the basis of the revised figures.

If there are a lot of returns involved over a long period, this might not go entirely smoothly but the best approach is definitely to submit the outstanding returns. And submit them to Southend, not to the bailiffs. But have copies available to show the bailiffs that they've been submitted, together with your recalculation of the amounts properly due.

Take no notice of Flashman below, who's trying to be clever. Do as your intuition above told you to...

Reply to
Nogood Boyo

I wouldn't bet on that being the case, I recently requested a print out of a vat account having managed to settle a simalar case recently, the jobsworth replied with a full printout back to January 1981 so unless there has been no zero balance in that time then you will get a b/fwd figure.

Chris

Reply to
Chris

Indeed, nothing is ever set in stone.

In the real world you have stupid people running successful businesses, and you have the situation that when the VAT return is due they look in the tills and there isn't any money there.

People who are that useless often don't keep records of any description. Any VAT return you cobble together will be nothing more than a guess.

When the bailiffs turn up it concentrates their minds and Businessman A asks his Dad to ask his very good friend Mr Floyd to do something.

There are two options:

1) Business goes bust. 2) HMC&E are paid.

If (2) then the amount has to:

1) Be affordable. 2) Satisfy the VAT man.

So you know the answer, the only thing left is to present it in a manner which is acceptable to everyone, a bit of "horse-trading".

Reply to
Troy Steadman

One more point about this, I didn't say the C&E assessments are set in stone, I said the figures are set in stone.

The bailiffs are visiting David's client to collect a large sum of money. This business hasn't submitted a single VAT return in 4 years. They've had letters, reminders, penalties, phone calls, visits, solicitor's letters, finally the court has appointed a bailiff,

*still* they haven't submitted a single VAT return.

You reckon phoning the Inspector and promising to submit the VAT returns at some time in the future is going to wash?

Reply to
Troy Steadman

I agree.

Thank you for all your comments anyway.

The client's on the verge of a mental breakdown, and a near relative has called me in. All paperwork you've mentioned cannot be found, presumably destroyed.

I'm now thinking it's job for a more experienced team, or maybe the business should just 'fold' anyway.

David Floyd

Reply to
David Floyd

In message of Thu, 30 Sep 2004, Timothy Lee writes

Probably so. The family (of the client) are rallying around and they are building up Evrite 707 books for the last 4 years, so I should be able to do something for them. They've found the money to pay the bailiffs, now.

My original point was whether I could get VAT assessments amended to actual when completed.

I've never had this sort of mess to deal with before.

Well that's another thing too. No SA returns since the 2001 Return. IR have determined the assessment for 2001/02 (not sure yet about 2002/03). They can be amended.

When people have this sort of illness they seem to be very clever at deceiving people until the last crunch (which has now come).

Thanks for all your comments.

David Floyd

Reply to
David Floyd

Yes, and the surcharges and interest will recalculate as well, at which point the HMC&E printout becomes a little more difficult to reconcile. Although the assessments increase with time they often start low, HMC&E having nothing much to base them on, so it doesn't always follow that they will exceed actual.

Reply to
Troy Steadman

That's a tiny amount, even our one/two person company pays that sort of amount per quarter. If the whole several year c*ck-up only results in a bill for £2000 then it hardly seems worth being VAT registered.

Reply to
usenet

Just to add my 2p to the above advice...

I used to work as a tax inspector in NZ so the following may not necessarily apply to the UK, but for what it's worth:

Check with the Tax Inspector how the bailiffs were involved. In my experience the bailiffs are sent _after_ a court judgement. If this is so, then furnishing actual returns will not affect the amount owing as that has already been approved by the courts. If so, then you will have to apply to either HM or the courts direct to get the judgement anulled and a new assessment issued on the basis of actual returns. Be nice to the Tax Inspector to keep him/her onside to push for annullment and a fresh assessment from their side.

No need to tell you to move quick if the bailiffs are knocking!

Shano

Reply to
Shano

This case was different from David's in that the business had been paying some assessments and some lump sums when they could no longer ignore the threats.

Reply to
Troy Steadman

it's more or less the same here..... just as you described it

Reply to
DoobieDo

You can automatically but they may want to do an inspection.

What is the reason for the lack of information?

Reply to
Peter Saxton

No it isn't..!

There won't have been a court judgement - it will almost certainly be a case of C&E levying distress. C&E Notice 930:

"Distress (Diligence in Scotland) is a commonly used method of recovery by taking possession of your goods and/or assets.

If you fail to respond to a written demand for payment, we may authorise a warrant to levy distress/do diligence on your goods/assets.

Your premises may be visited by a Customs officer and/or Bailiff to levy distress, or in Scotland, by a Sheriff Officer, to do diligence.

If we do levy distress/do diligence it may mean that:

your stock, equipment, vehicles or other assets may be removed immediately or after a short period, and later sold if the debts, and any related costs, are not paid in full. (We will accept full payment or may agree to reasonable proposals to clear your debt at any time prior to the sale of the goods);

sale proceeds will be set against your tax debt and costs to date;

in Scotland, a third party may also be ordered to release to us, funds, goods or earnings belonging to you in order to clear your debt. This is known as Arrestment; and

any debt remaining after we have taken distress may be the subject of further action."

C&E will accept returns at any time, as I've already explained. If they are credible and show that the amount being pursued by the bailiffs is not correct, they'll recalculate everything and start again. BUT DON'T WAIT UNTIL THE BAILIFFS KNOCK THE DOOR...

If there are genuine reasons (eg mental health) for non-submission of the returns and realistic steps are being taken to deal with the problem, explain it in writing (with supporting evidence) at once...

Reply to
Nogood Boyo

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