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Inaccuracies not all deliberate

02 September 2013
Issue: 4418 / Categories: Tax cases , VAT

Bilal Jamia Mosque (TC2727)

A management committee claimed on behalf of the taxpayer mosque input tax of £36 747 in April 2008 in respect of construction costs of the building.

HMRC said the sum was not recoverable because no business activity was taking place. It was later agreed that 65% of the claim could be attributed to business use – or the mosque could deregister from VAT and claim a refund under the DIY builders scheme.

The mosque wished to remain registered but did not proceed with its input VAT claim based on 65% in the hope a 100% claim might be possible. A lack of response led to the Revenue reducing the claim to nil in April 2009.

The mosque claimed input tax of £42 214 its return for the period to April 2010. The amount included the original £36 747 that had been disallowed.

HMRC refused the claim and imposed...

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