Triumph in Tax Tribunal: Victory for our client in VAT dispute

We are thrilled to share the exciting news of a significant victory for our client at Tax Tribunal.

Last month, our expert team, led by Joe McDermott, successfully represented a jewellery company and its director in a high-stakes tax appeal against HMRC’s VAT and penalty assessments.

The case overview

Our client, a jewellery company, and its director supplied second-hand watches.

Following a VAT visit at the business premises, HMRC contended that the company had failed to maintain the appropriate business records and was not entitled to use the second-hand margin scheme to account for VAT.

On behalf of our client company and its director, we lodged appeals against the following decisions made by HMRC:

• A decision to issue a substantial VAT assessment to the company under Section 73 of the VAT Act 1994.
• A decision to assess the company with a penalty based on deliberate behaviour under Schedule 24 of the Finance Act 2007.
• A decision to issue a Personal Liability Notice to the director under Para 19 (1) Schedule 24 of the Finance Act 2007, making him personally liable for the company penalty.

The main points of contention revolved around the correct application of the VAT margin scheme, whether HMRC had used ‘best judgment’ in making the assessment, and whether the director had deliberately submitted inaccurate VAT returns.

The victory

Through rigorous cross-examination of HMRC witnesses by our counsel, Michael Avient, we highlighted key inconsistencies and procedural errors in HMRC’s decision making.

We demonstrated that our client company was eligible to use the VAT margin scheme, that the VAT declared on returns submitted to HMRC was accurate, and that our client had not deliberately caused a loss of tax.

At the start of the second day of the hearing, HMRC agreed to withdraw the VAT assessment, penalty assessment, and personal liability notice.

Our client was spared a second day in court and the stress of waiting for the Tax Tribunal’s judgment on the matter.

Financial relief for our client

In an additional win for our client, HMRC agreed to cover a significant proportion of the litigation costs, ensuring that our client does not bear the full financial burden of the legal process.

This case underscores the importance of meticulous representation in HMRC disputes and highlights our unwavering commitment to defending our clients’ rights.

We are incredibly proud of the positive impact this outcome has had on our client’s business and look forward to delivering exceptional results in future cases.

If you need help dealing with a tax investigation or an appeal to the Tax Tribunal, please contact us.

You can get in touch with our friendly and experienced team on: 0203 675 8122 or email jeremy.johnson@intaxltd.com.

inTAX is a specialist tax disputes firm. We deal with disclosures, investigations, and tax enquiries of all descriptions, including COP9, fraud investigations, VAT fraud, tax avoidance, let property disclosures and tribunal appeals. However, we don’t just deal with the serious end of tax investigations; we are also happy to handle smaller enquiries, disputes and problems that can be equally as worrying for our clients