Compulsory online VAT filing is Illegal!


Three VAT registered businesses have won their appeals against HMRC’s requirement that they file their VAT returns online.

All of the appellants ran their own small businesses. Two of the appellants experienced disabilities which made it excessively difficult or impossible for them to use a computer. A third lived in a remote area of the country where broadband access was absent or unreliable. Three were of an age which made learning how to use a computer particularly difficult and they would have had to incur the cost of instructing an agent. They had all filed their VAT returns promptly and accurately on paper for many years.

In a ground-breaking decision, the judge held that the regulations which required online filing of VAT returns without providing exemptions for older people, those with disabilities or those living in parts of the country too remote for broadband access, were in breach of the appellants’ human rights and were unlawful under EU law.

One piece of information that this case publicises is that in exceptional circumstances, HMRC allow a VAT return to be submitted by telephone. There is no published information available regarding this as HMRC don’t really want people to ask to be allowed to use it. Given that, as currently practiced, it requires HMRC to phone the business at a time and date pre-arranged three months in advance, it unlikely that there would be a stampede of business people clamouring for this concession to be available to them.

It remains to be seen whether HMRC will be appealing this decision.

If you have any questions regarding VAT or have been challenged by HMRC call our experienced advisers today on 0845 177 5500 or using our online form.

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