§ Mr. Peter Reesasked the Chancellor of the Exchequer what is the policy of the Commissioners of Her Majesty's Customs and Excise as regards the costs of value added tax appeals when the taxpayer has been unsuccessful.
§ Mr. Robert SheldonIn general, Customs and Excise do not seek costs when a taxpayer has been unsuccessful before a VAT tribunal. However, they have in the past felt justified in applying for costs in a few exceptional cases which have either involved hearings of a substantial nature or have involved misuse of the tribunal procedure resulting in public money being expended to little useful purpose. This policy is currently under review in the light of five years' experience, although it is not envisaged that there will be any major changes. I hope to make an announcement later in the year.
As regards subsequent appeals to the High Court, Customs and Excise would normally seek costs when they are successful in accordance with the normal rule that costs follow the event. They are, of course, always prepared to consider representations of exceptional hardship or other special circumstances on their merits.
§ Mr. Peter Reesasked the Chancellor of the Exchequer whether it is the policy 427W of the Commissioners of Her Majesty's Customs and Excise to assess a registered person to value added tax contrary to advice previously given by them.
§ Mr. Robert SheldonWhen it is established that an officer of Customs and Excise, with the full facts before him, has given a clear and unequivocal ruling on VAT in writing; or it is established that an officer knowing the full facts has misled a trader to his detriment, the Commissioners of Customs and Excise would only raise an assessment based on the correct ruling from the date the error was brought to the attention of the registered person concerned.
§ Mr. Brothertonasked the Chancellor of the Exchequer whether he will alter the value added tax collection period to coincide with firms' annual accounting periods.
§ Mr. Robert SheldonAs I announced during the Budget debate on 12th April, while this has been allowed in the past, except where the financial year of a business sends on or near 31st December or 31st March, in future all businesses with turnover up to £50,000 will be allowed to opt to change their VAT periods to align them with their own financial years. To go further than this at this stage would add seriously to Customs and Excise administrative costs, but we will keep this matter under review in the light of practical experience.