HMRC, over the past six months, have become even more aggressive in their approach to those businesses and individuals that are finding themselves in a VAT repayment position.
Their latest efforts include a dedicated taskforce set up to target fraudulent VAT repayments across the West Midlands. It is expected that this task force will recover nearly £7m of outstanding taxes. Nationally, over £22m has been recovered since 2012. The target for 2014/15 is £100m.
HMRC’s Jennie Grainger, director general of enforcement and compliance, said: “HMRC taskforces are deployed in sectors and areas where we’ve detected a high risk of tax evasion. People being targeted by our taskforces have no intention of playing by the rules and could end up facing a heavy fine or even a criminal conviction.”
HMRC has launched 70 taskforces since 2011. A further 30 are planned for 2014 to 2015.
“In a previous VAT taskforce, a trader who claimed to be exporting vehicles and secondhand white goods was found to have fraudulently claimed over £500,000 of input tax. He was sentenced to four and a half years’ imprisonment and was disqualified from being a company director for six years.”
This taskforce may also pick up on traders who have inadvertently mis-claimed VAT or do not fully understand the procedure.
We have seen a number of businesses recently that have experienced vat visits specifically to challenge a repayment. If you are concerned and wish to discuss this further, please contact us on 024 7651 8555 or 0121 711 2468.