VAT Certificate balls up

[CarlosBrooks]

Ok this is a long story but bear with me coz i'm in trouble and I have no idea what to do and any help i can get would be ace.

So in early 2009 i was made redundant from my position as a lab tech. Ok job not great money but a good job never the less. So i started selling stuff on ebay using my redundancy pay (about £3000) to try to make ends meet while i got another job. Didn't sell much, maybe got about £200 profit selling random things like dvd's and stuff. i knew it wasn't much profit so i thought about buying bulk stuff and found myself getting a VAT certificate so i could get bulk stock.

I ended up not using the certificate, never bought any stock and don't think I even received a certificate in the post, I soon after got a new job. I then moved house 3 times and basically forgot about the certificate. Until earlier this week when a certificate came through the post.

When I received the certificate I thought "oh yeh i'll see if i can cancel it, seen as this ended up coming in the post and it clearly doesn't auto cancel if not used. Sent off a cancel form on like Wednesday then received a VAT bill a day later. A whooping 3 and half grand to pay . I'll be phoning the tax place on Monday morning to try and sort it out. What should I expect? Am I fooked?

Any help with me being an idiot would be greatly appreciated.

[TheCyclingProgrammer]

You shouldn't owe any VAT if you didn't make any sales after becoming VAT registered.

You may have penalties for not filing a VAT return though and I'm surprised it's taken this long for the VAT man to catch up with you.

What does the bill say? It's probably an estimated amount. Not sure what the estimate would be based on though.

[TheCyclingProgrammer]

Here's the details of the penalties.

https://www.gov.uk/vat-returns/surcharges-and-penalties

They are largely based on percentages of what you owe, though you may have enough defaults to trigger the £30 penalty which will apply even if you owe nothing.

At worst though you should be looking at a hundred quid or so in penalties (if any) not thousands.

Ring HMRC, explain you've been an idiot, explain that you never traded and they may close your account without penalty.

If you've had an assessment then I suspect you may need to submit a return for each period you've missed.

[CarlosBrooks]

the letter says:-

Our record show that your business has VAT debt. You must pay the amount due immediatly.

The law allows us to enforce payment of this amount.

You can pay by direct debit... etc etc

if you are unable to pay or don't believe this payment is overdue contact us now on 0300 200 3832.


Thanks alot for what you've already told me i feel much more at ease, i'll pay any penalty they want but their is no way i can pay 3 and half grand. unless they want to come round and take the copper piping from my house, or tear out the new kitchen and sell that.

[TykeMerc]

It will be estimates, interest on unpaid estimates and penalties for non submission of returns. Odds are VERY high they will expect missing returns to be replaced, they will send you the paperwork to fill in. With nil trading that will take a few minutes per form, tedious, but do it.

It will take more than just a letter to HMRC to say that no trading has taken place, odds are it will be a bit protracted and you will end up stumping for at least some of the penalty charges. It's down to how much of an utter jobsworth and total arse the officer you get assigned to the case is.

It can take ages to get them to see sense, I still periodically get chased for a non debt that actually went through the HMRC formal complaints procedure and I got an apology, but every 12-18 months I get snotty, threatening letters from HMRC and debt collection companies.