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Warning: chosen VAT flat rate categories are in danger of attack
KEY POINTS
- Are HMRC focusing on the oil sector and its chosen flat rate scheme category?
- It is the taxpayer who chooses the appropriate category.
- The importance of recording the reasons for the chosen category.
- Decided cases referencing the choice of rates.
- A change of rate does not mean that the original decision was unreasonable.
A couple of months ago a reader north of the border told me that HMRC had set up a task force in Scotland to challenge the chosen flat rate categories of many businesses but focusing mainly on workers in the oil sector.
The team’s strategy was very simple: try to recategorise these workers from their chosen category of “business services that are not listed elsewhere” (with a 12% flat rate percentage) into the category...
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