I took on a new client last year and was told that the vat was annual but I've submitted a vat return for the last quarter for the whole year and now HMRC won't pay the refund as the previous 3 vat returns haven't been submitted.
I've spoken to HMRC but they are very unhelpful so I wondered do I:
a) submit 3 x £Nil returns, or,
b) submit the previous 3 x returns as they should have been and complete form VAT652 Notification of Errors in VAT Returns?
My client is a butcher so his VAT return is always for a refund and for last year was for a refund of £3k.
I would send a letter to the VAT Error Correction Dept, explaining what has happened, details of what the figures should have been, and also how the error arose. It may be a good idea to also include a VAT652.
I'm not sure how penalties work when there is a constant refund situation - one of my clients who always gets refunds never brings his paperwork in on time so his returns are always late and yet he never gets a penalty!
