News:

HMRC's heavy handed approach continues (February 2012)

HMRC has clearly received instructions from the Treasury to raise as much revenue in the form of assessments as possible, even if those assessments are not valid. They are also refusing to repay VAT to hundreds of companies for no reason whatsoever, again in an effort to replenish the Treasury coffers.

The biggest problem companies face is that HMRC are so aggressive that they feel reluctant to challenge them, or believe that HMRC cannot be challenged. Also, the speed in which HMRC solicitors try and wind up companies is astonishing, even if they are healthy, profitable companies. Luckily there are ways to deal with HMRC.

HMRC Negotiate with fraudsters (January 2012)

HMRC will introduce new procedures for civil fraud investigations later this month. As part of the Government's commitment to tackle VAT and other fraud, HMRC's new Contractual Disclosure Facility (CDF) will be launched on 31 January 2012 and follows consultation with interested parties in the autumn.

Under the new facility, HMRC will contact taxpayers, in writing, to inform them that they are suspected of serious tax fraud, and offer them the opportunity to enter into a contract to disclose that fraud within 60 days. This is a novel approach, which we suspect is due to the serious lack of resources within HMRC and, therefore, the inability to conduct criminal prosecutions.

iPhone Traders - HMRC Suspect Fraud (December 2011)

Almost all iPhone traders will have experienced significant attention from HMRC in relation to reclaiming VAT on receipts that do not bear the company name. CTM represents several traders who employed people to buy iPhones from Apple retail shops in small, but regular, quantities. Every client has experienced lengthy delays, or has had their input tax denied and we are currently appealing such decisions to reclaim between £20,000 and £1 million.

The moral of this story, is make sure your company or an employee name is on the receipts.

Two Sisters Submit Massive False VAT Claim (December 2011)

Two sisters from Colwyn Bay, whose systematic frauds funded lavish lifestyles filled with luxury property, fast cars and private schooling, were jailed today after submitting VAT returns requesting repayment of £161 million.

All non-surgical treatment not VAT Exempt (November 2011)

The Government recently clarified the law, by releasing a new public notice alerting various clinics, private hospitals etc. that all cosmetic procedures, not merely non-surgical ones such as laser treatment and Botox, which were already subject to VAT, are taxable supplies. In essence if the treatment is not for health reasons, then you must charge VAT and you must be VAT registered.

For example hair transplant clinics that believed they were exempt from VAT have had a wakeup call; they should have been charging VAT for several years, which, if declared would be disastrous to all such clinics. The problem has been that HMRC's guidance has been less than clear and it is unlikely that, if clinics register for VAT purposes now, HMRC will seek to recover VAT for previous years. If, however, you attempt to keep under the radar and are caught, HMRC will undoubtedly raise an assessment starting from the first day of trading.