Flout the VAT rules at your peril. The well-known chef and restaurant owner Paul Heathcote MBE has just appeared in court over allegations he got things badly wrong, highlighting yet again that the VAT man is not to be messed with.

Paying a VAT surety up front

Fairly or unfairly, HMRC sometimes asks traders to hand over cash as ‘security’ relating to their eventual VAT burden. Mr Heathcote, who has won Michelin Stars, Catey Awards and the Egon Ronay Chef of the Year award, was subject to the rule, and was supposed to pay a so-called VAT ‘surety’ of £25,000 or so to Customs. But he didn’t do it in time, which meant he wasn’t really supposed to trade in food, which is VATable. By not paying the £25,000 surety in time and keeping his restaurant open, he contravened HMRC’s conditions.

Luckily Mr Heathcote paid up shortly after finding out about the issue, but the payment hadn’t cleared by the time his court date filtered through. No doubt customers at his highly-respected Heathcotes Brasserie and The Olive Press in Preston, Lancashire, will be relieved. Food as good as his doesn’t come along every day.

Apparently the chef is “anxious to make HMRC are not out of pocket and he has been trying hard to resolve it.” He has been awarded unconditional bail and the case has been put on ice until November 20th 2013. Here’s wishing him the best of luck.

Never treat VAT casually

It just goes to show, if you’re in a business that has to take VAT into account in any way, shape or form, you absolutely must have someone who knows their VAT onions on your side to make sure everything is kept in apple pie order. The VAT man is unforgiving, determined and powerful. And it obviously benefits business owners to act accordingly.