We all know that with everything, there are always horror stories of when things went terribly wrong. How can you help your clients avoid becoming the centre of a cautionary tale? Read some that we’ve come across to help you flag potential issues with your current clients, to avoid them becoming the horror story.
HMRC dispute
We were approached by a client to assist with an appeal to the Tribunal after HMRC had assessed and discussions between the visiting officer and client had reached an impasse. The assessment would have been extrapolated to company crushing liability of £2.7m.
Rather than merely proceeding with an appeal and litigation, we reviewed the facts and correspondence. HMRC had become confused and so we simplified the core elements and provided these with a request for an internal HMRC review. On their review, HMRC agreed that the visiting officer had misinterpreted the position when issuing its assessment and the decision was set aside.
We were delighted our work obtained a correct and favourable outcome and that our client avoided the cost and stress of a Tribunal hearing.
Land transaction review
A recent client asked us to review a land transaction with two possible structures to confirm whether there were any VAT issues and whether either structure provided an enhanced VAT profile.
Due to the unique circumstances, the proposed options did not meet the legislative definitions to comfortably conclude that zero rate relief would apply, in spite of appearing as if it should. Our advice set out where the areas of weakness were, the risks and potential solutions (and likelihood of success of these solutions).
As a result, the client was able to revisit previous advice given on another project to identify a potential risk. He is now able to better manage the risk on the proposed transaction.
New Audit client
A new client of one of our accountancy firms had historically assumed no vat registration was necessary for them. This meant the VAT section of the audit had been ‘blindly’ signed off for years because they weren’t VAT registered.
We asked some questions about their transactions, among other things and found they actually should have been VAT registered, so previous audit sign-offs had been incorrect (huge PI risk for that accountant!).
We are now assisting our client with unpicking the historic issues this has caused, which could go back twenty years.
These cases really exemplify how our advice helps our clients manage their risk. When onboarding a new client with VAT services, include a VAT review as a must have for these clients. Have an expert cast an eye over their accountants/audits, whatever service you provide them at least every 3 years!
