Partner (VAT & Duty) and Head of South East Asia Business at James Cowper Kreston
Meera Rajah heads up James Cowper Kreston’s VAT services and leads their expansion into South East Asia. She has developed extensive technical knowledge over more than 20 years specialising in VAT and adopts a practical approach that has successfully argued against HMRC to achieve substantial VAT savings and compensation for clients.
Her experience is comprehensive, encompassing business restructuring (mergers and acquisitions), VAT cost reduction strategies, international cross-border supply chains, partial exemption methods, land and property transactions, film production, charities, and VAT planning and mitigation. Additionally, Meera assists businesses in disputes with HMRC, drawing on her years of valuable experience from previous roles within the organisation. Her background with HM Revenue and Customs has equipped her with a range of skills and expertise in inspections and negotiations, greatly benefiting her clients.
Understanding VAT compliance in the UK: Realreed and a tale of caution
November 3, 2023
A recent High Court ruling serves as a stark reminder to businesses that they cannot take previous HMRC VAT enquiries or inspections as a conclusive assurance of their VAT compliance. Meera Rajah, a leading expert in VAT services at James Cowper Kreston, sheds light on this pivotal decision and its implications for businesses. Read her full article here or the summary below.
The misconception about HMRC enquiries and VAT compliance in the UK
It’s a common but erroneous belief that an HMRC enquiry, especially one that concludes without an assessment or explicit ruling, validates the accuracy of past VAT returns. However, as Meera points out through the example of Realreed Ltd, such assumptions can lead to significant misinterpretations of a business’s VAT position.
Realreed Ltd’s Case: A misunderstood VAT exemption
Over 22 years, Realreed Ltd underwent five HMRC VAT enquiries, all while mistakenly declaring certain income as VAT exempt when it should have been standard-rated. The business believed these enquiries had established a “legitimate expectation” of their VAT practices, only to be corrected by the High Court’s rigorous analysis.
The High Court’s stance on HMRC inspections and VAT liability
The High Court’s review of HMRC’s case reports and notes revealed that no formal decision regarding the VAT liability had been given. This judgment emphasises that businesses cannot presume inspections as endorsements of their VAT return accuracy and must instead ensure they independently verify their VAT treatment.
The responsibility of accurate VAT returns rests with the businesses
The court’s decision underlines the ultimate responsibility businesses hold for the accurate submission of VAT returns. Meera Rajah’s examination of the case highlights the need for companies to maintain vigilance over their VAT affairs and seek expert guidance to navigate the complexities of VAT legislation.
To grasp the full extent of this High Court decision and its implications for your business, read the complete article by Meera Rajah. It’s an essential read for those looking to ensure their VAT compliance is beyond reproach. If you would like support with your VAT obligations in the UK, please get in touch.