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  • VAT Memo - Input tax - Recoverable input tax - Partial exemption - Special methods - HMRC powers - Directed method - 2183
    HMRC has the power to direct a business to use a particular method, or to stop a method being used, although not in respect of supplies where input tax is specifically recoverable (¶2098). Directions must be clear. Such directions will be issued only where a change cannot be negotiated, or where HMRC perceives that the VAT system is being abused. Often they only come into force at a future date, unless there is a significant amount of VAT at risk. Directions are subject to appeal (¶4260+) and there is no...
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  • VAT Memo - Compliance - Registration - Taxable persons - Business splitting - Consequences - 2638
    The consequences of a direction on the new taxable entity and the individual members are as follows: - the persons named in the direction must register as a single taxable entity from the date specified in the direction, effectively resulting in a partnership for VAT purposes; and - existing VAT registration numbers of any of the persons in the direction must be cancelled.
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  • VAT Memo - Compliance - Reporting - Returns - VAT periods - 2987
    The VAT period (also known as prescribed accounting period, or tax period) determines which invoices (both sales and purchases) are included on the particular return, by reference to the tax point (or for users of the cash accounting scheme, by reference to the date of payment (¶4880+)). The trader is notified of the applicable VAT periods after registering, and the relevant details appear on the certificate of registration (¶2708).
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  • VAT Memo - Enforcement - Powers - Supervision and control of the VAT system - Reviews and appeals - 3410
    Within 30 days of the date of notification of a decision by HMRC, a taxpayer can ask for a review, or appeal against the decision to a tribunal. The general rules in relation to reviews and appeals can be found at ¶4210+. Specific details of reviews and appeals in relation to the exercise of particular powers by HMRC can be found in the sections dealing with those powers. If a taxpayer requests a review of a decision from HMRC, this does not preclude a taxpayer who does not agree with the result of the review...
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  • VAT Memo - Enforcement - Reviews and appeals - 4210
    This chapter deals with the current system of reviews and appeals, which covers all taxes, including VAT. This system came into operation on 1 April 2009. Many of the cases referred to in this chapter were decided under the former system of rules and procedures for appeals but may still be persuasive in similar matters under the current system.
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  • VAT Memo - Enforcement - Reviews and appeals - Internal reviews - Statutory reviews - 4230
    The duty to offer an internal review applies as a statutory first step, but only if the matter is capable of being appealed. If the matter can be appealed, HMRC must offer a review. If the matter cannot be appealed, HMRC does not have to offer an internal review, but a person who has an interest in the matter may be able to request a review or apply for ADR (¶4240+). It may be more appropriate to take up the opportunity of a review than to make an immediate appeal, particularly where a trader can provide further...
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  • VAT Memo - Enforcement - Reviews and appeals - Appeals - 4260
    An appeal against a decision by HMRC must initially be made to the tribunal. After the tribunal's decision, either party may then appeal to the Upper Tribunal and thence to the UK courts (¶4328+), provided that leave to appeal has been granted at each stage. Depending on the issue in point, the tribunal or the courts may refer a case to the CJEU (¶4345+). Where there is no right of appeal against a decision by HMRC or a tribunal, a person can apply for judicial review (¶4338+).
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  • VAT Memo - Enforcement - Reviews and appeals - Appeals - Appeals to the tribunals - Role of the tribunal - Coming to a decision - 4322
    Where a tribunal has more than one member, the decision may be taken by a majority of votes, with the chairman having a casting vote. The chairman of a tribunal may announce the decision or direction at the end of the hearing, or may give it in writing at a later date. A written copy of the decision or direction will be sent to each party within 28 days of the decision finally being made, or as soon as practicable thereafter. 1. The written copy of the decision will contain the findings of fact by the tribunal...
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  • VAT Memo - Particular activities - Retailers - VAT on takings - retail schemes - Scope - Authorisation - 6336
    Except in the case of a bespoke scheme, there is no requirement to obtain HMRC's permission before starting to use a retail scheme. HMRC can refuse to allow a trader to use a retail scheme at any time where: - its use does not give a fair and reasonable result; - refusal is necessary for the protection of the revenue; or - it is reasonable to expect the trader to use normal VAT accounting. A retailer can appeal against such a refusal. - What is fair and reasonable can be construed from comments in cases involving...
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  • VAT Memo - Business situations - VAT groups - Tax avoidance - 8875
    There are specific anti-avoidance rules that aim to prevent abuse of the group rules through the: - exploitation of the fact that intra-group supplies are usually ignored for VAT; or - use of overseas entities. - These powers were introduced to counter certain schemes whereby, for example, Company A purchased standard-rated supplies, claiming a full input tax deduction. Company A then made an onward supply, which was treated as being made (to some extent) between VAT group members. A simple method of achieving...
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