I prefer the old days...
When you could just say that "My dog ate it."
A British smart meter company that missed a series of VAT payments to the taxman insisted in a Leeds court that a Chinese typhoon and Apple's iPhone 7 delivery schedule was to blame. A decision on the April tribunal was handed down last Friday. Chameleon Technology UK, which makes "bespoke in-home displays for the global …
This would never happen in America - our poor President Trump is still unable to release his tax returns because the IRS is still auditing them and has been doing to for years ... or at least that's what he's saying. Does this make America more "business friendly" or more corrupt? Perhaps the company would be better accommodated in the USA?
just in Time is potentially fragile. There are plenty of case histories of extreme events scuppering JIT based systems e.g. car production. Bad weather events in certain parts of the world are not unexpected - the precise locations / damage done cannot be predicted ages in advance, but some regions are prone to extreme storms (be it a typhoon in Asia or a hurricane hitting the States) - so IMHO, judge should have not accepted that excuse as a chance weather could cause chaos. They chose not to take out insurance (FFS I take out bad weather insurance for some of my holidays that e.g. involve boats in potentially stormy seas, flights when stormy weather likely). Insurance is not cheap, so a gamble to not insure, but if no insurance then they should have paid the fines (and should keep cash in reserve for the unexpected - at some point the "unexpected" will happen)
Except that this is VAT, which is essentially calculated and collected on the basis of sales invoices less purchase invoices (at least in principle), and is not usually affected by the status of the goods/services or the company's cash flow. The standard position is that, yes, companies may have to pay the VAT due on income that they have not received yet (and the corollary is that they can receive a VAT refund for purchases booked if the corresponding sale has not been completed before the VAT period is over).
It appears that the primary reason they've been allowed to get away with the [essentially bogus] "typhoon Nida ate our homework" excuse is that HMRC failed to do its job properly, even though it looks like the company has "form" in not paying their VAT on time (according to the article).
No companies collect VAT on behalf of the HMRC, hold it for up to 3 months then hand it over.
Companies will pay HMRC the difference between the VAT claimed on purchases and VAT charged on sales, in other words on how much they have made (if they are a company making VATable products)
Companies will also pay VAT on invoices that they have issued but which have not yet been paid.
"His efforts to speak to HMRC's late payment department were refused partly because Chameleon's case had been personally assigned to Liddle and partly because Chameleon was still in a short-term "time to pay" VAT arrangement from the previous financial quarter."
It is fairly reasonable to assume that had HMRC returned the calls then an arrangement could have been made and the default avoided. Seemed a waste of the court's time.
Taxman turned a deaf ear and demanded payment, and got a hard slap of truth : when someone calls, you answer the damn phone. You are neither a jailer nor a judge, you're an administration and your job is administer, not bully.
Yes, there are undoubtedly companies that are doing their best to skirt taxes (eh, Apple ?), but you do not decide to punish before you have probable cause to do so and, in this case, you didn't because you refused to listen.
From my armchair position, its seems like the taxman sees SME's as easy targets and quick wins, so they put the squeeze on them, rather than go after large Enterprise that have the resources (advisers and legal teams) to fight - in addition to giving them what seems like "special" deals (pay us X million, and we'll forego the rest, as we can't be bothered to audit you or your offshore accounts).
Don't get me wrong, they have a tough job.. but I think they lack respect and understanding of customer service - Not even a bank treat people who default this badly!
A few years ago I filed a VAT return and paid a couple of days later. A couple of weeks after the due date I received a letter from HMRC outlining their plans to audit me due to non-payment.
After a panicked phone call to HMRC (after being on hold for 2+ hours), it transpired that either fat-fingers or poor eye-sight resulted in my mistaking a 1 for a 7. I'd paid £6 over. I'd paid Six Whole Pounds too much VAT.
On their systems, at the time - no idea if it's still the case, paying an amount that doesn't tally, despite reference codes etc, counted as not paying at all, even if you'd paid more.
No apology, I just got two more letters after that - one to say the matter had been resolved, and a second, a few days later, to tell me my returns / payments were being monitored for accuracy and future discrepancies would bring the wrath of HMRC down upon me.
All because I accidentally paid a few bob extra, on a VAT payment only worth about £900.
Absolute f**king pricks.
Anonymous, absolutely bloody Anonymous.
This post has been deleted by its author
"iPhones come in pretty small boxes, surely a single cargo plane can carry more iPhones than the UK will buy during launch week?"
True, but flights out of China may have been block booked - so if not enough cargo spaces are available (due to Apple and/or everyone else), your stock will be sitting in a terminal building waiting for the next flight where there is space.
Also, some firms will pay a premium to get their stock sooner, so shipping companies will prioritise those shipments on earlier flights, leaving anyone else, waiting.
"He described VAT paid to the company by its suppliers but not yet due to HMRC as "an interest-free loan" from the taxman"
I could say the same thing about my student loan payments, that HMRC are happy to hang on to for a year, earning interest for them and costing it for me, before passing on to the SLC.
Why does HMRC do this to real businesses yet fail to apply this to the many football clubs in the UK that use tax owed to HMRC as their own to spend as they see fit.
Whenever a football club has gone titsup in the past they have all owed vast amounts of unpaid tax.
Come on HMRC, get your finger out and make them cough up.
Biting the hand that feeds IT © 1998–2019