My query relates to the payment of VAT and duty and how it is applied to the C79 VAT Certificate when using Inward Processing (IP) suspension.
A few months ago, we prepared our quarterly IP suspension return with the associated C88’s custom declaration forms for goods we wanted to change from IP to “Home Use”, ie paying the duty/VAT. We submitted this to HM Revenue & Customs (HMRC) and a couple of weeks later received three payment requests for the duty and VAT owed to HMRC to be paid immediately by BACS or cheque as our deferment account had insufficient funds available. We have never had to do this before, as we have always paid duty and VAT on IP entries against our deferment account and then reclaimed the VAT when the amounts appear on the C79.
We paid the requests in full. After seven months nothing relating to these payments had appeared on our C79, so we decided to claim the VAT back as it was a lot of money, nearly £200,000. The claim was rejected even though we provided all the information regarding the payment requests from HMRC, the IP details and payment details, etc. However, a suspended fine for “careless behaviour” was issued against us.
I need to know how and why the duty and VAT we paid in full did not make it on to the C79 quickly — what HMRC’s process is and how to stop it happening again as I have more requests this month from HMRC to pay duty and VAT by BACS as our deferment account is again at its limit and we need to pay another fine.
Also, can I contest the penalty — is it worth challenging? Interestingly, apparently the VAT will be on our C79 next month.