HMRC VAT FRS Cockup

[MikhailCompo]

So annoyed about this. This is the second time i have had dubious or inaccurate advice from my accountant regarding VAT.

I specifically clarified with them the date with which I would be moved to the std VAT scheme/off the FRS and advised them I needed to make a purchase of some assets, they responded with "you will be able to claim VAT back on purchases made after the 01/04/2017"

I made those purchases after that date and some time later received a letter from HMRC that it would actually only take effect from 1 June. Had I known I would obviously have delayed my purchases - the only reason I benefit NOT being on FRS is to do with asset purchases, so this mistake has effectively eliminated any benefit whatsoever.

Am I in any position to request HMRC reconsider the date with which the rate change takes place?

Note:

I would like to change a thread title which names an accountant firm which eventually transpired was HMRC at fault

The thread is useful info for others, so doesn't make sense to delete it totally.

Thanks

I would like to confirm whether the firm sent the request to HMRC in a timely manner. Am I entitled to see the correspondence sent between an accountant and HMRC when it is to do with my affairs?

[northernladyuk]

So annoyed about this. This is the second time i have had dubious or inaccurate advice from my accountant regarding VAT.

I specifically clarified with them the date with which I would be moved to the std VAT scheme/off the FRS and advised them I needed to make a purchase of some assets, they responded with "you will be able to claim VAT back on purchases made after the 01/04/2017"

I made those purchases after that date and some time later received a letter from HMRC that it would actually only take effect from 1 June. Had I known I would obviously have delayed my purchases - the only reason I benefit NOT being on FRS is to do with asset purchases, so this mistake has effectively eliminated any benefit whatsoever.

Am I in any position to request HMRC reconsider the date with which the rate change takes place?

I would like to confirm whether the firm sent the request to HMRC in a timely manner. Am I entitled to see the correspondence sent between an accountant and HMRC when it is to do with my affairs?

Seriously? Of course you are. Have you requested them off your accountant?

[Neil@Intouch]

So annoyed about this. This is the second time i have had dubious or inaccurate advice from my accountant regarding VAT.

I specifically clarified with them the date with which I would be moved to the std VAT scheme/off the FRS and advised them I needed to make a purchase of some assets, they responded with "you will be able to claim VAT back on purchases made after the 01/04/2017"

I made those purchases after that date and some time later received a letter from HMRC that it would actually only take effect from 1 June. Had I known I would obviously have delayed my purchases - the only reason I benefit NOT being on FRS is to do with asset purchases, so this mistake has effectively eliminated any benefit whatsoever.

Am I in any position to request HMRC reconsider the date with which the rate change takes place?

I would like to confirm whether the firm sent the request to HMRC in a timely manner. Am I entitled to see the correspondence sent between an accountant and HMRC when it is to do with my affairs?

To remove you from the FRS, only an email would have been required to FRS applications to remove you from this scheme. On this email they would have stated an effective date, which should have been 1 April 2017, if this is what you requested.

Double check this is what they did. If not, find out the process they used. To answer your final question, yes this is something that can be resolved and would advise that you get your Accountant to do this as soon as possible.

[Maslins]

My understanding is the obligation is on the client/accountant to tell HMRC they're leaving the scheme, that's it. I wouldn't worry about the date on the letter from HMRC, provided you can see that they've quoted a different date to what you requested.

We've had at least one client where we requested leaving from 31 Mar, which was in the middle of a VAT quarter, but it made sense for the client. HMRC responded saying they accepted the client would be leaving from a month or two later (coinciding with the VAT quarter). We double checked what we'd sent, so ignored HMRC's date, and proceeded based on what we'd told HMRC. Perhaps this is what has happened here, and inniAccounts aren't at fault.

Given we've also had a case where we've believed the client was on the FRS for years, then as part of an HMRC VAT enquiry they pointed out they had no record of the client being on FRS at all, it seems they're not overly strict on this. Ie there must have been about 12 VAT returns submitted in that time, from every one of those, the numbers on it make it clear as day they were being calculated using the FRS, yet no query/flag from HMRC.

[pr1]

My understanding is the obligation is on the client/accountant to tell HMRC they're leaving the scheme, that's it. I wouldn't worry about the date on the letter from HMRC, provided you can see that they've quoted a different date to what you requested.

We've had at least one client where we requested leaving from 31 Mar, which was in the middle of a VAT quarter, but it made sense for the client. HMRC responded saying they accepted the client would be leaving from a month or two later (coinciding with the VAT quarter). We double checked what we'd sent, so ignored HMRC's date, and proceeded based on what we'd told HMRC. Perhaps this is what has happened here, and inniAccounts aren't at fault.

Given we've also had a case where we've believed the client was on the FRS for years, then as part of an HMRC VAT enquiry they pointed out they had no record of the client being on FRS at all, it seems they're not overly strict on this. Ie there must have been about 12 VAT returns submitted in that time, from every one of those, the numbers on it make it clear as day they were being calculated using the FRS, yet no query/flag from HMRC.

+1 same thing happened to me, requested 1st April but the confirmation letter said May 31st, my accountant (Gorilla) just sent a follow up letter clarifying that we are changing as of 1st April, apparently it's happened with quite a lot of people (HMRC VAT FRS dept are probably snowed under, as expected)

[MikhailCompo]

Thanks to everyone who responded with advice.

Firstly: the power of ContactorUK forum:

my accountant phoned me (this has never happened) shortly after i postwed this thread. Nice call to say the matter had been investigated and they had sent everything correctly, in a timely manner and requesting the change date as the end of my quarter, end of March as advised. They contacted HMRC regarding the June date and they admitted it was their mistake and would honour the date my accountant requested and would send correspondence to confirm revised date.

In fairness to my accountant I posted this thread without allowing their right to respond - the issue wasn't their fault and they've sorted it (as far as their part) right away.

They've asked to remove this thread which is understandable but I think more appropriate would be to remove my accountant from title. Can a Mod please amend it from inniAccounts to Accountants?

[Maslins]

Glad it's sorted.

For the sake of all suppliers out there, I hope going forwards you do a bit more research/make some attempt to resolve things privately before publicly slating a business. Mud sticks...though I appreciate you've asked for the thread to be amended.

[MikhailCompo]

Glad it's sorted.

For the sake of all suppliers out there, I hope going forwards you do a bit more research/make some attempt to resolve things privately before publicly slating a business. Mud sticks...though I appreciate you've asked for the thread to be amended.

This wasn't entirely without previous, although the previous could be considered the way HMRC legislation was interpreted...... I was going to link that thread here but I was careful not to name them and so won't link.

[MikhailCompo]

+1 same thing happened to me, requested 1st April but the confirmation letter said May 31st, my accountant (Gorilla) just sent a follow up letter clarifying that we are changing as of 1st April, apparently it's happened with quite a lot of people (HMRC VAT FRS dept are probably snowed under, as expected)

Is it reasonable to expect an accountant to follow up on a requested date from HRMC and ensure their request is actioned correctly? Or have I misunderstood what you have written?

That does not appear to have been done in my case.

[pr1]

Is it reasonable to expect an accountant to follow up on a requested date from HRMC and ensure their request is actioned correctly? Or have I misunderstood what you have written?

That does not appear to have been done in my case.

Once I received the "incorrect" confirmation from HMRC and passed it on to Gorilla, they sent a follow up letter - I'd say that was reasonable to expect