In William Newman v HMRC [2021] TC08147, the First Tier Tribunal (FTT) struck out the taxpayer’s appeal against HMRC’s refusal to accept a late ‘option to tax’ notification.
- In 2014, the freeholder of a pub offered to sell it to Mr Newman, the tenant-landlord, for £1.3m plus £234,000 VAT.
- Mr Newman found another party to sell the pub on to, for an agreed £1.8m plus VAT of £360,000.
- These transactions were completed on 22 May 2014.
- A late VAT return was submitted for the relevant quarter containing nil entries.
- Following an application for VAT deregistration in November 2014, HMRC issued a demand for £360,000 of unpaid VAT.
- In October 2015, HMRC’s permission was sought for a retrospective Option To Tax (OTT).
- This was subsequently corrected to be a delayed notification of an OTT. This notification was not accepted by HMRC.
- A considerable amount of correspondence followed with Mr Newman’s changing advisers.
- Ultimately, Mr Newman appealed to the FTT in February 2019, in respect of HMRC’s refusal to accept the late notification of an OTT.
Source rossmartin
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