HMRC Recovers £3.3bn from SMEs in Relation to Underpaid VAT
As per the tax investigation insurance specialists PfP, HMRC collected an additional amount of £3.3bn from small and medium sized enterprises (SMEs) as a result of inquiries related to under paid VAT, in the past one year.
As per PfP, the two newly created units at the HMRC were used to carry out the investigations in relation to the under paid VAT. The two teams created at the HMRC are namely Wealthy & Mid-sized Business Compliance unit and Individuals & Small Business Compliance unit. The PfP also stated that VAT is an important area of focus for the HMRC, and therefore further investigations with regards to VAT are likely to be followed up by the HMRC.
According to managing partner of PfP, Kevin Igoe, the investigations into VAT paid by the SMEs has proven to be incredibly beneficial and rewarding for the HMRC.
The amount of £3.3bn is comprised as a result of a combination of errors, carelessness or misunderstanding and also because of intentional underpayment of VAT.
The majority of the SMEs are in compliance with the rules and regulations with regards to the VAT set out by HMRC. However the actions by some of the businesses and individuals resulting in the underpayment of VAT means that is likely to closely oversee all the tax affairs in the next coming months. As a result of all this many innocent business owners will also be under the watchful eyes of the HMRC as they look to recover any unpaid VAT.
All the business owners should make sure that all their tax systems and records are safeguarded and are in order. Any uncertainty with reference to when and how much VAT is to be paid should be immediately cleared by taking professional advice from tax consultants or by seeking clarification and advice from HMRC itself.