Michael Griffiths (TC06697) was the victim of a PAYE foul-up by HMRC which resulted in his being served with a notice to file a self assessment tax return for 2013/14.
HMRC’s PAYE computer issued Griffiths with a tax calculation on 31 May 2014. Unfortunately, it only took into account one of his two employments and generated an overpayment of £579.80. A payable order was issued on 1 June, which he received on 3 June and duly banked.
Meanwhile, on 2 June, the computer issued a revised calculation which took account of all his income. Griffiths had, in fact, underpaid tax by 80p for the tax year (which would have been simple either to code out or to discharge). However, because of the payable order issue one day earlier the consequence was an “underpayment” of £581.60
In Shaw v HMRC  UKFTT 0381 (TC), the First-tier Tribunal (FTT) has cancelled late filing penalties because HMRC had not satisfied the statutory requirements of section 8(1), Taxes Management Act 1970 (TMA) as a notice to file had not been validly served on the appellant.
— Read on www.rpc.co.uk/perspectives/tax-take/shaw-tribunal-cancels-penalties/
In an important judement delivered at the end of June the Court of Appeal (Civil Division) held that Input VAT could not be recovered in the absence of an invoice showing VAT had been charged.
The court ruled that ‘in the absence of a VAT invoice showing that VAT was charged to Zipvit by Royal Mail’, Zipvit could not recover any input tax (even if that input tax was ‘due and paid’). Although HMRC do have discretion to accept evidence which does not fully comply with the statutory requirements for a VAT invoice, the court found that there was no support in the legislation or case law ‘for the proposition that a right to deduct may be recognised and given effect without production of a VAT invoice showing that the tax in question has been paid by the supplier’.
We were recently asked by a client to help assess and pick an expenses solution for their business. The business has about 200 people although probably about half of those don’t really travel or incur expenses regularly, and some of the people are based outside of the UK. Our client wanted a solution that enforced policy and improved compliance with receipt collection and VAT recovery. The project was borne out of an earlier piece of work we did for them on their non pay-rolled expenses to calculate and report their tax and class 1 liabilities. Having identified the options we negotiated the terms of the contract on behalf of our client. Implementation of the project is nearing completion and the system in now partially live and intended to be fully live by the end of the month. The cost of the project will be covered multiple times over by the savings in VAT recoverable and tax and class 1 NI.
Our short list went down to two providers, but in the end we chose Webexpenses over Concur on the basis of pricing transparency. Concur did offer a little more functionality but their pricing model in unfathomable and this was, quite rightly a significant concern for our client.