Commentary

V7.228A Retrospectively changing the choice of flat rate scheme category

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.228A Retrospectively changing the choice of flat rate scheme category

Part V7 Tax planning | Commentary

V7.228A Retrospectively changing the choice of flat rate scheme category

As explained above, HMRC should not challenge a taxpayer's choice of category on a retrospective basis as long as the initial choice was sensible. This is important because not every business will exactly fit into one of the 55 different categories, so an element of judgement is needed by taxpayers in many cases.

However, what happens if a new scheme user plays safe and adopts a category with a high flat rate percentage and then subsequently discovers that this choice was incorrect?

The case of Archibald and Co Ltd ([2010] UKFTT 21

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