HMRC Tackles London’s Fast Food VAT Dodgers
July 20, 2011 by Davenports Tax Team
Filed under Accountancy News
A new taskforce to tackle VAT abuse in London’s fast food outlets was announced today by HM Revenue & Customs (HMRC).
HMRC has identified that there is a problem with some fast food outlets deliberately falsifying their records and mis-declaring their true sales levels in order to avoid paying the correct taxes.
Mike Wells, HMRC’s Director of Risk and Intelligence, said:
“This taskforce will come down hard on fast food outlets that have chosen to break the rules and evade the taxes they should be paying. Honest businesses have absolutely nothing to worry about.
“This taskforce comes hard on the heels of one launched last month targeting the restaurant sector in London. If you deliberately seek to evade tax HMRC can and will track you down, and you’ll face not only a heavy fine, but possibly a criminal prosecution as well.”
This is the 4th taskforce launched by HMRC since May 2011. HMRC is planning a further nine taskforces in 2011/12, with more to follow in 2012/13. The taskforces come as a result of the Government’s £900m spending review investment to tackle tax evasion, avoidance and fraud from 2011/12, which aims to raise an additional £7bn each year by 2014/15.
If you are aware of someone who is evading their taxes you can tell HMRC via the Tax Evasion Hotline by phone on 0800 788 887, via the email hotline, or by post full details can be found at www.hmrc.gov.uk
SMEs Warned Over Business Records Checks
July 19, 2011 by Davenports Tax Team
Filed under Accountancy News
The taxman’s approach to small business records checks has undergone a “subtle change in tone” from being an educational exercise to a compliance check, advisors have warned.
HM Revenue & Customs yesterday released the summary of responses to its consultation on the business records checks initiative. It said that “business records checks are primarily a compliance check, not an educational exercise”.
However, Guy Smith, senior tax consultant at Abbey Tax Protection, said that this represents a “subtle change” from the way it was originally being sold to advisors.
In letters sent to businesses as part of a pilot, HMRC recommended areas of improvement for record keeping and informed the companies that they might receive visits within three months to check the improvements have been made, Smith added.
“Up until now, the underlying theme has been one of informed education,” he said. “However, that now seems to have changed with the publication of the summary of responses report.”
The consultation said: “A policy of not charging a penalty for an initial finding of significant record keeping failure would risk creating the perception that there is no need to change behaviour in relation to poor record keeping unless and until one has been caught out at least once.”
But this is in contrast to the consensus among respondents, Smith said, which favoured giving respondents time to make improvements and issuing first warnings.
Mike Down, tax partner at Baker Tilly, said that the initiative “has always been a mix of educational awareness and compliance checks”. But there are still issues about whether this is a good use of resources and how well publicised it has been.
Down also said that the Taxman “jumped the gun” on the pilots. “The summary of responses said the pilot scheme began on 4 April but the first letter was sent out on 21 March. They jumped the gun. The original consultation said it would start in the second half of 2011.”
Story from: Accountancy Age
Need help with your tax, contact Davenports today
VAT Cheats Targeted in Crackdown
July 5, 2011 by Davenports Tax Team
Filed under Accountancy News
As part of a campaign launched today aimed at VAT rule-breakers, HM Revenue & Customs (HMRC) will be sending letters informing businesses how to register to pay what they owe. The new campaign focuses on individuals and businesses trading above the VAT threshold of £73,000 turnover but who have not registered for VAT.
More than 40,000 letters will be sent out over the next few weeks. Under the terms of the VAT Initiative, those who have not registered to pay VAT can come forward any time up to 30 September to tell HMRC that they want to take part. If they make a full disclosure, most face a low penalty rate of 10 per cent on VAT that has been paid late.
They will also be invited to disclose any other tax arrears. Where they have to pay a penalty on undeclared tax other than VAT, this will be lower than the customary penalty of up to 100 per cent charged to those who fall outside the opportunity.
After 30 September, using information pulled together from different sources, HMRC will investigate those who have failed to come forward. Substantial penalties or even criminal prosecution could follow.
Mike Wells, HMRC’s Director of Risk and Intelligence, said:
“This is our third campaign, raising more than £500m from voluntary disclosures and a further £100m so far from follow-up activity.
“Our campaigns are designed to ensure tax is paid so that the money is available to spend on public services used by everyone.
“The aim is to make it easy for individuals and businesses to contact us, make a full disclosure of their income and face a reduced penalty on any tax owed.
“I urge people who have not registered their businesses for VAT to get in touch with HMRC and get their tax affairs in order simply and on the best available terms.”
To use the VAT Initiative people and businesses must:
- Register with HMRC by 30 September to “notify” that they plan to make a voluntary VAT disclosure;
- Tell HMRC about VAT due and make arrangements to pay it, as well as any penalties due, by 31 December.
How to let HMRC know of the intention to make a tax disclosure:
- Online by completing a notification form at http://www.hmrc.gov.uk/ris/vat/
- Ring HMRC on 0845 600 5217
A dedicated team is available to give information and advice.
Previous HMRC campaigns have targeted offshore investments, medical professionals and people working in the plumbing industry.
For assistance with your VAT obligations, contact Davenports today using the simply form below:
