Three years ago I switched to flat rate VAT. I have collected and paid my VAT based on my understanding of the system. My accounts have twice been audited in this period. I had a meeting last year that lasted over 2 hours to try and work out an error where I had double accounted for VAT. Still no spotting of error.

Yesterday I had visit from VAT inspector. Who within 30 minutes had told me that the flat rate was being wrongly paid and that I will be liable not only for the shortfall over 3 years, but also all the surcharges and interest. This is likely to be a bill of between £5 - £8,000.

Ha, ha, ha must think the HM Revenue and Customs. We’ve made a great sum of money out of a mistake.

Just for once, and this shouldn’t cost millions of pounds of external consultants, could the government actually do something helpful and useful for people trying to run small businesses.

Here’s a suggestion for free.

When a business goes on a flat rate scheme, why not invite them to an office and explain it to them for an hour? And then check the next two or three returns to make sure they’ve got it right.

But no, I really think it’s designed in the existing way so that i) it costs the HM Revenue and Customs less money with face to face contact - they can point to the clauses which explain it (but are generally incomprehensible) and ii) the whole culture of HM R& C is punitative rather than supportive.

So as well as now two sleeplessness, a general feeling of ‘why bother?’ an anxiety as to whether there are actually any accountants who understand these things and a new heap of work to do, I have a huge bill to pay.

Meanwhile we discover that 40 of the companies that are running PFI schemes have taken all the accounting and business admin offshore - no tax bills for them!