VAT registration penalty

JodieR

Client registered himself for VAT and thought that he should be registered from 1 Nov 2011 and contacted me in Oct to do his VAT returns for him. As instructed, he did a stock count at 1 Nov 2011 and I reclaimed the VAT on his first VAT return. As this return was a repayment he got an inspection and the inspector calculated that he should have actually been registered from 1 July 2011. I've now got a letter from HMRC asking for input & output tax from 1 July 2011 to 20 Sept 2011 to calculate his penalty.
Now we have no way of knowing what his actual stock was at 1 July, but after a lengthy discussion with the client we're assuming that it was the same figure are at 1 November, as there's no reason why it would be significantly more or less. Therefore, can I include the input VAT on the opening stock in the figures which are being requested on the penalty calculation form do you think? It's going to make a material difference to the amount so I don't want to get it wrong.

Hope someone can help!

SLM

Can somebody clarify this - calculating VAT based on your stock holding?? I have never heard of this??

Monsoon

SLM wrote: »

Can somebody clarify this - calculating VAT based on your stock holding?? I have never heard of this??

First VAT return included Pre Reg Input VAT (PRIV) - nothing new there.
Repayment return triggered investigation - nothing new there.

Investigation resulted in HMRC deciding the reg date was wrong - just pure bad luck.

Jodie needs date of stock at new reg date to re-calculate the PRIV, presumably.

Oh and Jodie, sounds fine to me

JodieR

Monsoon wrote: »

Oh and Jodie, sounds fine to me

Thanks, good, because this is what I did! I'm hopping that because it was an honest mistake and he's been very co-operative that there won't be a penalty anyway, but if there is I don't want it being more than it should be.