Traders continue to leave VAT man £2.6bn short
Stronger than expected growth in the UK economy appears not to have been enough to reduce the billions that businesses owe, but are not paying, in VAT.
Almost £2.6billion was officially outstanding to Value Added Tax collectors in October last year, compared to “close to £2.6billion” in VAT at the end of the 2015-16 tax year.
Lender comparison site Funding Options, which handed the latter estimate to the Mail on Sunday, says it shows that the amount of VAT overdue to HMRC remains “stubbornly high.”
VAT-registered companies not being paid on time for the goods or services they supply to their typically larger organisations has been blamed for the trend.
There was hope that the economic uptick -- growth rose 0.5% between July and September, beating expectations, further to 0.7% growth in the prior quarter -- would help cut the VAT debt.
All VAT traders must submit a return (usually issued on a quarterly basis), and pay any VAT owed within one month from the end of the VAT period stated on their return, or pay a fine.
In fact, reflecting to the Sunday Times on the VAT case of chess champion Michael Basman, Deloitte said HMRC would be restricted to four years of back payments had he registered.
22nd January 2017