VATAC7300 - Financial difficulty leading to the accumulation of debt in businesses: additional compliance issues
- Each case will need to be considered on its own merits and in consultation with the relevant Debt management Team. Other approaches to managing potential debt are available and so these must be considered alongside this option and the best solution for both HMRC and the business chosen.
- A written record of the reasons behind the decision to use this regulation should be kept. As Judicial Review is the only remedy for a business that objects. Therefore it is important that the factors and information considered alongside any advice followed is clearly documented.
- Businesses should be informed in writing of HMRC’s decision to change their stagger to monthly returns, clearly stating the reasons why this decision has been made (VATAC8600). There is no right to appeal this decision.
- The officer making the decision should take the appropriate action to amend the stagger. It is recommended that at least a month is left between the decision letter and the change being implemented; to allow the business to make any representations. However the officer should equally be mindful of the potential for debt to accumulate if the matter is left unchanged and so timely action after this month has passed is advised.
- If change of stagger is to proceed, send a written copy of your formal decision (VATAC8700).
- The decision should be made by the person best placed to judge the impact on the business and to defend that decision at judicial review. It must not be made at a grade lower than higher officer and should be authorised by an officer at least one grade higher than the decision maker.