VAT Cheats Are Taxman’s Newest Prey
HMRC has unveiled yet another initiative designed to close the tax gap. It will focus on individuals and businesses that are not registered for VAT in spite of trading above the tax’s £73,000-per-annum threshold. The announcement of the campaign closely follows both the introduction of a taskforce to target tax evasion in the restaurant trade, and the launch of a single compliance procedure that is currently in the trial stage.
The crackdown on VAT Cheats is scheduled to go live in the summer, after discussions between the Revenue and interested parties have concluded. Few details have so far been revealed by the taxman; George Bull, a tax partner at Baker Tilly, said he expected traders who turn over amounts consistently just below the registration limit to receive the most attention from investigators. Mr Bull also remarked that HMRCs consultation on the proposed scheme contrasted positively with the “knee jerk” launches of other initiatives launched recently to combat tax dodging.
Tax investigations specialist Jon Cassidy of PKF welcomed the VAT registration initiative as another sign that the tax department is finally getting its act together. He predicted that the Revenue will offer low penalties for those who come clean but follow up with detailed investigations into those who don’t. This, he said, would be a more forceful approach than that of other recent disclosure facilities, such as the plumbers tax safe plan.