The ATT has called on HMRC to consider a review of the 51 business categories specified for the flat-rate scheme, following a number of recent First-tier Tribunal decisions in favour of taxpayers who have used the sweep-up category for ‘other business services not listed elsewhere’. This category applies a 12% rate of VAT.
Commenting on the recent cases, Neil Warren, of ATT’s VAT sub-group, said they have ‘confirmed that a business owner should use ordinary everyday words’ to describe the business. HMRC has been issuing retrospective assessments on the basis that the taxpayer’s initial choice of category was unreasonable.
ATT president Michael Steed said now is ‘the right time for HMRC to amend its guidance to accept that honest small business owners have adopted the correct category as intended by the legislation’.
The ATT has called on HMRC to consider a review of the 51 business categories specified for the flat-rate scheme, following a number of recent First-tier Tribunal decisions in favour of taxpayers who have used the sweep-up category for ‘other business services not listed elsewhere’. This category applies a 12% rate of VAT.
Commenting on the recent cases, Neil Warren, of ATT’s VAT sub-group, said they have ‘confirmed that a business owner should use ordinary everyday words’ to describe the business. HMRC has been issuing retrospective assessments on the basis that the taxpayer’s initial choice of category was unreasonable.
ATT president Michael Steed said now is ‘the right time for HMRC to amend its guidance to accept that honest small business owners have adopted the correct category as intended by the legislation’.
