Hairdressers win VAT battle over membership rules

THE NATIONAL HAIRDRESSERS FEDERATION has won back £20,000 plus interest and costs from HM Revenue & Customs after the taxman changed the rules over membership subscriptions.

Previously, the taxman allowed non-profit-making membership organisations charging a membership fee to use extra-statutory concession 3.35 to apportion between standard-rated, zero-rated and exempt VAT elements.

The hairdressers won an initial tribunal against the taxman, and were awaiting payment, when the taxman changed the rules.

With another tribunal looming, the taxman again backed down. Advisors from CCH helped the NHF receive its settlement as well as interest and costs.

Glyn Edwards, VAT consultant at CCH, said: “When we submitted the pre-tribunal statement case, HMRC’s advocate agreed with me that they should not have applied the new rules to a prior appeal and the case was dropped.

“Even better for the NHF was the fact that they not only received the £20,000 plus interest they were owed; they were also awarded costs, which almost never happens with HMRC.”

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