Divisia v The Revenue & Customs (whether assessment made to HMRC's best judgement - withdrawal of taxpayer's authorisation to use flat rate scheme) [2023] UKFTT 543 (TC) (22 June 2023)

Divisia v The Revenue & Customs (whether assessment made to HMRC's best judgement - withdrawal of taxpayer's authorisation to use flat rate scheme) [2023] UKFTT 543 (TC) (22 June 2023)

HMRC's VAT assessment was made to best judgment based on material provided by PAD, and PAD failed to demonstrate any error in HMRC's calculation. However, HMRC could not reasonably have been satisfied that withdrawal of PAD's authorisation to use the Flat Rate Scheme was necessary for the protection of the revenue, as there was no abuse or risk of revenue loss justifying such action.

Citation
[2023] UKFTT 543 (TC)
Parties
Appellant: Pierre Andre Divisia; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
22 June 2023
Procedural Posture
VAT Assessment Appeal / First Tier Tribunal (tax Chamber) Final Determination
Outcome
Appeal allowed in part
Legal Topics
Value Added Tax, Flat Rate Scheme, Best Judgment Assessment, Withdrawal of Authorisation
Tax Law Value Added Tax Flat Rate Scheme Best Judgment Assessment Withdrawal of Authorisation

Case Brief

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Parties

Pierre Andre Divisia

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Assessment Appeal / First Tier Tribunal (tax Chamber) Final Determination

Legal Issues

  1. 1 Whether HMRC's VAT assessment was made to best judgment under section 73(1) VATA 1994
  2. 2 Whether HMRC could reasonably have been satisfied that there were grounds to withdraw the taxpayer's authorisation to use the Flat Rate Scheme under regulation 55P VAT Regulations 1995

Ratio Decidendi

HMRC's VAT assessment was made to best judgment based on material provided by PAD, and PAD failed to demonstrate any error in HMRC's calculation. However, HMRC could not reasonably have been satisfied that withdrawal of PAD's authorisation to use the Flat Rate Scheme was necessary for the protection of the revenue, as there was no abuse or risk of revenue loss justifying such action.

Court Disposition

Appeal allowed in part

Orders

  • Assessment to be reduced to reflect VAT calculated using applicable Flat Rate Scheme rates; parties to agree amount or revert to tribunal if unable to agree