Poundland Ltd v HMRC Comms

In Poundland Ltd v HMRC Comms [2021] UKFTT 188 (TC) (17 February 2021) the taxpayer appealed against an assessment issued by HMRC in lieu of a closing stock adjustment when it moved onto a new bespoke retail scheme.

Poundland had been using a bespoke retail scheme since 2002 which did not require any annual adjustments for stock movements or closing stock adjustments on ceasing to use the scheme (‘old scheme’).

HMRC and Poundland held discussions over several years regarding the taxpayer moving onto a bespoke scheme based on EPOS data. HMRC insisted that when Poundland transferred onto a new bespoke scheme that a closing stock adjustment was required. Poundland transferred on to a new bespoke scheme in March 2017. HMRC issued an assessment for underpaid VAT as Poundland did not undertake a closing stock adjustment.

Poundland appealed against the assessment arguing that the old scheme had not underestimated its VAT liability and there was no requirement under the old scheme for a closing stock adjustment; even if the old scheme had resulted in an underpayment HMRC could not issue an assessment for a closing stock adjustment as...

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