Newsletters:
Honeyfone Lose Appeal In Unusual CircumstancesHoneyfone Lose Appeal In Unusual Circumstances
What on earth was the Tribunal thinking?
- Very experienced in the retail and wholesale of mobile phones.
- Regular repayments made until the 03/06 and 04/06 period.
- 29 export transactions resulting in a £5m reclaim.
- All deals were back to back and at the end of month
Download the full May Newsletter here (PDF)
Increasing number of traders dropping out
Through CTM's own customer base of 50-60 exporters, and through enquiries received from dozens of other companies, it is clear that approximately 15% of traders are walking away from decisions without appealing, and a further 5%, or so, are representing themselves.
Some companies with multi-million pound claims have decided that they do not have either the finance, or the stomach, to continue to fight on. With the average time for an appeal being 12-15 months, it requires a strong will to appeal on your own, if no funding is available.
Download the full April Newsletter here (PDF)
Olympia case weaker, yet same outcome as Livewire
Some of the facts of the case in brief:
- £1.6 million repayment claim.
- Purchases were of mobile phones from other UK wholesalers in periods 04/06 and 05/06.
- 15 tax loss chains involved 10 suppliers and 8 customers.
- Three contra trader chains involved one supplier, who was also the importer, and one customer.
For more facts and information, pleased download the newsletter below.
Download the full February Newsletter here (PDF)
A long way to go, but hope at last
The Tribunal decision in the case of Livewire is testimony to a well prepared case. These types of cases are not very complicated and the legal argument will be similar for each appeal. However, case preparation is everything. It was particularly satisfying to see a firm employing ex Customs VAT investigators (like CTM) succeed where solicitors have failed.
Download the full January Newsletter here (PDF)
No end in sight for many companies
For many companies that are yet to receive a decision, it must be very deflating to think another year has gone, without any sign of movement. Some of CTM clients have been waiting for 23 months for the verification to be complete and some traders only have one or two transactions to verify.
Download the full December Newsletter here (PDF)
Companies in liquidation may pay twice for appeal
The cost of liquidation
Companies that went into forced liquidation or were advised to go into voluntary liquidation, for example because of Corporation Tax issues, may have to pay the liquidator money on account in case they lose their appeal.
Download the full November Newsletter here (PDF)
The decisions are very slow, especially for CPU traders
How long can this go on for?
Decisions continue to be made in small numbers, for three reasons:
- Customs could not cope with too many appeals at the same time.
- The Tribunals could not cope with too many appeals at the same time.
- Customs are unsure of how many cases they will win and are continuing with their EU verification as a means of justifying the delays.
To highlight the problems; out of the 50 exporters that CTM has as clients, only 20% have had decisions, after 18 months of verification.
Download the full September Newsletter here (PDF)
Calltell Telecom accused of being involved in Fraud
Calltell Telecom Limited and Opto Telelinks (Europe) Limited have received significant criticism from the Tribunal Chairman in the most recent "means of knowledge" appeal.
The decision is lengthy and not easy to digest, so we have attempted to break it down in to the areas traders are interested in.
Download the full August Newsletter here (PDF)
Trader loses appeal in Tribunal
The first decision on means of knowledge and contra trading has been reached and CTM has been informed that the trader lost their appeal in Tribunal. We will post the full decision on our website as soon as we receive a copy. We have no more information on this subject as yet, although Officers we have spoken to have hailed it a great victory for Customs. We will comment further when we have studied the decision.
Download the full July Newsletter here (PDF)
If you are not already aware, expect the worst.
A number of companies have approached CTM for assistance in the last few days, as they had received negative decisions regarding their VAT. It is concerning to note that none of them had any tax losses in their supply chain. It is now clear that the absence of a tax loss in the supply chain has no bearing on the decision.
Download the full June Newsletter here (PDF)
What hope is there for other companies?
In our last edition, we discussed a company that had excellent deal and due diligence procedures in place and who were expecting an imminent decision.
This week they received notification that they will have their VAT, totalling over £2 million, disallowed. In order for you to compare your systems, we have listed the due diligence and trading procedures adopted by this company, below, and you should note that they have many years experience in the mobile phone industry:
Download the full Updated May Newsletter here (PDF)
Customs admit more delays due to errors in verification
Officers have recently admitted to CTM that additional and unacceptable delays are being caused because some Officers are not completing the verification process thoroughly. This will be difficult to stomach for some traders who have seen the verification process already last over a year.
Download the full May Newsletter here (PDF)
Small But Important Payments Have Been Authorised
Two of CTM's clients have been informed in writing by their respective Officers that they will receive repayments relating to exports that formed part of the extended verification. Although one payment only represented £28,252 and the second was a £300,000 payment for exports of non IT products, it is still a turning point and represents a loosening of the government purse strings.
Download the full April Newsletter here (PDF)
Senior HMRC Officers Instruct Staff to End Verification
We have been informed in the last few days that Senior Customs Officers have instructed all VAT Officers, unless in exceptional circumstances, to end the verification by the end of March.
This instruction only applies to the April 2006 periods and earlier, but Officers have stated that other periods will also be completed, including some as late as August. However, we do not believe that any periods that fall later than August will be completed for several months, unless they involve a very small number of deals, or form part of a series of claims spanning earlier periods.
Download the full March Newsletter here (PDF)
Extended Verification - Are Most Decisions Imminent?
2006 has been a challenging year, to say the least, for most businesses trading in high value products. Our clients even include large businesses that have purchased direct from manufactures and, yet, their VAT still remains withheld. However, some subtle changes are in the air and there are signs that a large proportion of the extended verification may be drawing to a close.
Download the full February Newsletter here (PDF)
Tribunal Appeal - How Many Traders Can Afford It?
If you thought 2006 was a difficult year, think again; 2007 is shaping up to be even more challenging. Our sources have informed us that HM Revenue & Customs ("Customs") have warned the Tribunals that they will soon refuse VAT in respect of 900 traders.
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E-mail: enquiry@ctmltd.com