Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Readers' forum: Good faith

02 October 2018
Issue: 4666 / Categories: Forum & Feedback

HMRC’s approach to incorrectly charged VAT.

I recently visited a prospective new client and it turned out that they had paid more than £400 000 plus VAT in good faith to a supplier who was supposedly VAT registered. After a VAT inspection it has emerged that the supplier was not registered but had invented a VAT number for their invoices.

The supplier in question is a family associate to the prospective client who out of interest is keen to know the answers to a few questions. First will HMRC seek to recover the £80 000 of VAT paid by the potential new client because they did not have valid VAT invoices? Could they argue they had acted in good faith? Second would HMRC seek to recover the £80 000 from the family associate who has raised invalid VAT invoices? If so what are the possible consequences for them?

Query 19...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon