Warning for companies who have failed to pay their VAT

HMRC are to scrutinse companies who have outstanding VAT. 

The taxman will be targeting approximately 50,000 businesses this month who have not paid their VAT on time.  These businesses will be told that from 28 February their tax affairs will be under scrutiny and are exposed to further inspection should their VAT remain outstanding.

Some of the businesses will have received an assessment for the VAT periods in question.

This campaign is aimed at those businesses who have one or more outstanding returns and have already been asked to submit but have failed to do so.  By coming forward voluntarily, businesses may receive better terms for any penalties that could be imposed, potentially lower than if HMRC contact them first.

Richard Wild,  PFK VAT Director said, “Over the past few years, HMRC has launched a series of campaigns, which typically offered individuals the incentive of discounted penalties for voluntary disclosure alongside the threat of tough sanctions if they were subsequently caught out.

“Those participating in the Plumbers’ Tax Safe Plan, for example, faced reduced fixed rate penalties of 10% or 20% of the tax owed, rather than the standard rates, which could exceed 70% depending on the severity of the offence.

“With this latest campaign, by contrast, HMRC seems to have focused on the stick, whilst leaving out the carrot altogether. As a result, it is little more than a veiled threat of an impending crackdown, rather than a proper campaign or amnesty, and it is therefore unlikely to have as much impact as previous initiatives.”