Autumn 2006 Newsletter Contents Into The Unknown Season Of Goodwill Farewell Andre Toon Done Doon Day Of Reckoning Artistic Licence Gizmos Again A Free Lunch Sweet As Nectar Security Concerns Going For A Spin The Cap Does Not Fit While It's Hot? Code Cracking Bad Connection Broken Trusts You Can't Take It With You Dividend Returns IR35 RIP? Spam Spam Spam Breaking Up Duty Calls Time Shift Moving Vans

Security Concerns Sometimes Customs ask (all right, demand) that a trader "deposits security" as a condition of being allowed to trade. That means that the trader will either have to hand over cash or, more likely, a bank guarantee to Customs. Typically it will be for six months' net VAT if the trader files quarterly returns, or four months' net VAT if monthly returns are used. Customs' concern is that the business will collect VAT from customers and then either go bust or disappear with the money, leaving Customs short. If they have security, it becomes the bank's problem. They generally require security where they see a poor compliance history, either in the current business or in a previous business run by the same people. If you have a history of going out of business owing Customs money, a new venture will be required to deposit security. You can appeal to the Tribunal about this, but it's unlikely to work. The Tribunal has to consider whether Customs had reasonable grounds to make their decision. Most appellants argue "we have so little money that the requirement to deposit security will push us over the edge" - which proves that Customs were right to be worried and have made a reasonable decision. The Tribunal may be sympathetic but the trader can't win on those grounds. If Customs have demanded security, it is a criminal offence to carry on trading 30 days later unless the security has been provided. So it's a serious matter. If you are having problems with your VAT compliance, it's worth trying to sort it out before things get that far. Don't let matters drift, and don't hope they won't mind. If you are having difficulties with VAT, we will be happy to advise you on how to put your house back in order.