The row erupted after Customs chose a busy lunch hour to send a bailiff to demand VAT payment which was not due.
The move prompted a protest to the Ombudsman, with the proprietor claiming his trade suffered because customers and staff lost confidence in his business. The compensation was upped to £750 instead.
The case was revealed in the latest reports from parliamentary commissioner Michael Buckley. The mistake arose because restaurant owner ‘Mr B’ took over the VAT registration of the business which formerly occupied the premises, with the agreement of Customs. Buckley said this was the result of ‘very bad advice from his former accountant’.
Customs had sent a red reminder to Mr B, but his assistant, who rang Customs about it, was told to take no action. Customers and staff overheard a conversation with the bailiff, when he arrived. The bailiff withdrew after speaking to Customs by telephone.
In other cases reported by Buckley, Customs paid a doctor £500 plus costs for delaying the review of a decision to demand VAT on computer equipment to help people suffering from dyslexia.
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