I have a client in a similar boat. I'd suggest you call HMRC today as they have a VAT amnesty until the end of the month where they are reducing late penalties.
Your client did not apply for the scheme at the time and he doesn't qualify now. I heard it costs HMRC £100 to write a standard letter so at that rate changing a VAT Return might cost them £500 a time. I'm just wondering, how much would your client have saved under the flat rate scheme?
If it was the accountant who was responsible for VAT you could try bringing the matter up with them. Annual and Cash accounting won't lower the amount of VAT due, but can simplify things (I'd change at the beginning of a new accounting year).
Other than that, there's nothing to lose, by writing to HMRC requesting back-dating to the Flat Rate Scheme and quoting a similar Tribunal case. That should put the ball in their court whereas by telephone, it is easier to 'fob you off'.
"When considering an earlier or later start date, we will consider all the facts including the timing of your application and your compliance record. We will not normally allow you to go back and use the scheme for periods for which you have already calculated your VAT liability".
..... but if you can build up a case, then as Kris says, you need to get the application in and keep proof of the date application made. Compare the circumstances of the case with the Anderson one. Was the bookkeeper ill or were there other personal circumstances? Their accountant was on a working group (presumably assisting the treasury to improve the administration of VAT).
The income tax assessments will have to be adjusted if you get a long back-dating, so you should factor in your fees, to make sure it will be worth it to the client.
If there is a particular benefit in going back only a limited period of time, then you might stand more chance requesting that.
Hi, I know, it's a sign of how complicated VAT has become when they needed to create an uneven playing field. On the other hand, I find their visiting officers far more sympathetic now, than I did in the 80s.
I can see it from C&E's point of view, that if they opened the floodgates, an industry would grow up back-dating VAT Returns and their officers would be doing little else - Cue an avalanche of Missing Trader type fraud schemes. To answer your question, "why don't they let you just join" (late), my answer would be that it would be an uneconomic use of their time.
I don't know what the client does, but I whenever I compared Flat Rate with regular VAT accounting the advantages were always out-weighed when the client bought equipment or a van.
best wishes and try to p.... the other way lol Tim
-- Edited by Don Tax on Wednesday 28th of September 2011 11:04:24 AM
Oh you didn't have that one who looked like a cross between a shark and an alien, did you?
He charged interest on about 12 vat quarters once where the client had only been accounting up to the last Saturday of the period. I think it came to about £100 and probably cost twice that to administer.
