Tribunal – VAT deregistration case
A recent First-tier Tribunal case examined a taxpayer’s appeal against HMRC’s refusal to cancel its VAT registration with effect from the date of VAT registration. The case concerned a café that had applied for VAT registration with effect from 3 March 2008, the application was made on the basis that the café’s expected taxable turnover would be over £100,000 in the next 12 months.
The taxpayer in this case contended that the application for VAT registration had been made erroneously and sought to deregister with effect from the date of registration. HMRC argued that the application for VAT registration had been properly made and indeed the taxpayer confirmed the original VAT registration (by correcting the postcode on the VAT Registration Certificate). The Tribunal was clear that the taxpayer’s decision to prepare accounts on the basis that it was not registered for VAT was an error which is not relevant to the issues arising in the appeal.
The Tribunal agreed with HMRC that there were no grounds to allow the registration to be cancelled from 3 March 2008. However, the Tribunal accepted that the date the taxpayer called HMRC requesting its deregistration from VAT would be the effective date of deregistration. This was some three months earlier than the date HMRC received the taxpayer’s letter requesting de-registration. The appeal was therefore allowed in part.