FDs oppose three-year VAT legislation

Finance directors have condemned the Government’s three-year rule limiting VAT repayments, with less than one in five viewing the new measure as prudent, writes Jon Bunn.

Over 200 FDs were surveyed for Accountancy Age and Reed Accountancy Personnel’s first Big Question, a new weekly service designed to provide a snap-shot of the profession’s views on burning issues of the moment.

More than 70% felt the ruling was quite or very unreasonable. Many FDs accepted that Customs & Excise should be able to limit claims for overpaid VAT but the majority argued that it was unfair for Customs to maintain the right to pursue businesses for underpaid tax for up to six years.

Kelvin Menson, FD at solicitors Prince Evans, said: ‘At the very least there should be equitable treatment in that both Customs and businesses should be able to look back for the same period, be it three or six years.’

Others were not so sympathetic to businesses effected by the rule. John Hoddinott, FD at Surrey machine distributors Greenshields JCB, added: ‘Somewhere there must be a cut-off point. Also, if a company has failed to see problems so long ago, it’s really its fault.’