In a recent case, Copthorn Holdings returned to the First-tier Tribunal for a second time to challenge HMRC’s refusal to accept a backdated VAT group registration. Following the taxpayer’s initial success, HMRC was instructed by the tribunal to reconsider its policy regarding when discretion might be exercised in this area. The second appeal concerned HMRC’s continued refusal to allow the backdating, even after its policy had been revised. The tribunal found HMRC’s revision of the published guidance to be a ‘cynical endeavour’, but its only option was to remit the case back to HMRC for further consideration, with recommendations regarding the scope of the policy. The case raises important questions about HMRC’s approach to its published guidance and how it should be held to account.
