“Permission denied!” by Les Howard, partner in vatadvice.org, a specialist VAT practice based in Cambridgeshire

Les Howard highlights a case where HMRC removed a company’s permission to use the Cash Accounting Scheme.

This is not something we come across every day! Very many small businesses use the Cash Accounting scheme, some without knowing it! Originally, when the scheme was introduced, the taxpayer had to apply to HMRC for permission. Now, of course, there is no requirement to seek permission.

However, the scheme still has a number of conditions. In particular, in relation to the Michael Robinson case, there is a general power of HMRC to exclude someone from the scheme. VAT Regulation 64(1)(d) reads: “A person shall not be entitled to continue to operate the scheme where… the Commissioners consider it necessary for the protection of the revenue that he shall not be so entitled.”

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