HMRC takes an extra £1.8bn from VAT abusers
The taxman’s haul from stamping on VAT abuse has more than doubled -- the equivalent of rising by more than £1.8billion in 12 months – mainly thanks to cracking down on small firms.
In fact, HM Revenue & Customs collected £5.3billion from VAT investigations, up from £3.5bn in the last year, according to tax investigation insurance firm PfP.
The 51% jump was put down to HMRC exerting more pressure on small firms, which have reportedly had to hand over £8.4bn in VAT in the last three years, compared with just £3.9bn from corporates over the same period.
Local tax teams running and acting on "VAT abuse publicity and investigation campaigns" launched by HMRC will get the credit, as their yield has risen 70% in the last year from £2.3bn to £3.9bn.
The teams' targets include non-VAT registered companies, e-traders, landlords and the self-employed, all of whom are in the crosshairs of HMRC’s “more aggressive approach to tax evasion.”
Such parties will have popped up on the Revenue’s Connect computer system, PfP added, which matches business and personal data from numerous sources with details on tax returns.
Since being introduced, the system has become a ‘key weapon’ for HMRC, as it flags up to tax officers whether a business’s likely actual sales match, or don’t match, their VAT payments.
“In general, the VAT regime for small businesses has become harsher over the last few years,” reflected Kevin Igoe, PFP's managing director.
“A company that files its VAT return on paper and not online will face a penalty. HMRC is also making increased use of its powers to confiscate and sell-off the assets of small businesses that are late in paying their VAT.”
Editor’s Note: Further Reading –
9th April 2014