HMRC has the power to retrospectively approve an option to tax under paragraph 30 of Schedule 10. This power is normally used in favour of the taxpayer where all of the conditions for automatically opting were not met at the time the option was made and the taxpayer failed to obtain HMRC’s permission. In Rolldean Estates v HMRC [2023] UKFTT 359, however, the taxpayer sought to prevent HMRC using its power to retrospectively validate Rolldean’s option and rely on the fact the option was not valid in order to avoid accounting for VAT on the sale of the property. This was despite the fact that the reason the option had not been validly made was due to the fact that Rolldean had made exempt supplies of the property before opting, which it had failed to declare to HMRC.
Source: simmons-simmons.com
