No Excuses for Mistakes, Even Though Everyone Makes Them
I am the last person to claim to be perfect. Outside of the workplace, I make plenty of mistakes. When it comes to the little things in life, getting things wrong can be the stuff of legend and many an amusing anecdote.
When it comes to my work and my clients’ finances, I prepare so hard and work so hard that I eliminate all serious mistakes.
A case has just come out of the VAT tribunal that featured an accountant’s cock-up. This number cruncher apparently advised a café owner that he was operating under the VAT registration threshold because his turnover was a mix of standard and zero-rated sales and his standard-rated sales were under the threshold. Pretty basic stuff, but a useful reminder not to get blasé about zero-rated and exempt supplies. Exempt supplies are ignored, zero-rated supplies most definitely are not. Exempt supplies are exempt from VAT. Zero-rated supplies are VATable, just at 0%.
The case went to tribunal because the taxpayer argued that he had a reasonable excuse, relying on the advice of another.
The tribunal pointed out that just as there is no excuse for ignorance of the law, there is equally no excuse for reliance on someone else’s advice.
My advice is to appoint an accountant a bit sharper than the one in this case. Don’t just go for the cheapest quote.
As an aside, the appellant’s trip to tribunal was not completely wasted. The judges ordered HMRC to revise the assessment for VAT and accompanying penalty downwards because HMRC had assessed them for 20% VAT on the zero-rated sales!! No penalty of course for the VATman who made the same crass mistake as the accountant. There could be no penalty big enough for that…