Businesses outside London which are registered for VAT have had to deal with the Customs & Excise decision to farm out technical decisions to the regions. Many of them have been obliged to pay tax which they do not owe, while others have been subject to delays and conflicting advice.
The policy to devolve case handling to the regions is commendable in principle. However, in practice company directors have faced contradictory advice, slow response rates from local Customs officials and requirements to pay VAT which has been wrongly attributed.
Accountants and clients have found that it is often difficult to establish the name of the individual local case officer. More often than not, if he or she is identified, the official is out on visits.
Correspondence sent to local offices – by fax as well as post – apparently fails to arrive.
In addition, ACCA members and their clients have already discovered technical decisions made by local Customs offices can conflict with national guidelines.
While interpretation has always been open to local officials, some of the advice given since devolution flies directly in the face of national guidance.
Complicated enquiries also appear to fox local officials. Anything more demanding than the current rate of VAT or level of the registration threshold can bring deafening silence from Customs. Local Customs offices are especially perplexed if a section of the VAT Act 1994 is mentioned.
An accountant lodging an appeal should move from the back waters of Customs and go to the head of department situated in Bedford Avenue, London. A grave mistake in the appeals procedure could be made by the taxpayer at this point. The appellant will be offered the chance for the first stage of the appeal to be heard by a higher ranking officer within the regional office.
That individual is likely to have already been consulted before the original judgement was issued, so it is unlikely that they would now take a different view. Go straight to the top – send the appeal to London.
If the accountant has the backing of operational notes, it is extremely unusual that they will receive a surprise decision, contradicting their original view, from London.
Clearly there might be nuances attached to each specific case that could make the original blocking decision correct, but too often it seems local office does not actually know the ins and outs of the VAT system that it is attempting to administer.
Chas Roy-Chowdhury is the tax technical officer at ACCA
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