Time running out for VAT cheats - Money - News - Moneyfacts


Time running out for VAT cheats

Time running out for VAT cheats

Category: Money

Updated: 01/12/2011
First Published: 01/12/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

VAT cheats have been warned that they have just one month to come clean, HM Revenue & Customs (HMRC) has said.

In July this year, HMRC launched its VAT Initiative in which rule breakers were offered a special plan to put right their tax affairs. The chance to participate, and be guaranteed the conditions contained in the plan, ended on 30 September.

Those who came forward must register for VAT by 31 December 2011. They will then receive their VAT registration number and instructions on how to complete their first VAT return.

Once this has been submitted most will face a lower penalty rate of 10% on the VAT that has been paid late.

Since the opportunity ended, HMRC has been identifying those who did not come forward. Substantially higher penalties and even criminal prosecution could follow.

The VAT Initiative campaign focuses on businesses trading above the VAT registration threshold - for this year, an annual turnover of more than £73,000 - but who have not registered for VAT with HMRC.

The trades affected include construction, business services, hair and beauty, hotels and catering, retail distribution, recreational services, motor vehicle distribution and repair, sanitary and domestic services, agriculture and horticulture, property and road haulage.

Those that did not come forward during the initial offer have been told they still have the chance to do so, as the penalties meted out will be less than if they were caught red-handed.

"I urge anyone with unpaid tax to use it to come forward and avoid potentially lengthy and costly investigations," said Marian Wilson, head of campaigns at HMRC.

"The penalty they will pay will still be lower than when HMRC catches up with them."

HMRC said that it will begin moving in on businesses and individuals that it believes should be registered for VAT in the New Year, with substantially higher penalties and even criminal prosecution a possibility.

Find the best financial information for you -Compare Financial Solutions

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

It’s good to talk (about money issues)

They say that it’s good to talk, yet it seems there are some subjects that people are just too embarrassed to discuss. Money is definitely one of them, yet failing to talk could make those issues far more stressful than they need to be.

Give your finances a pre-Christmas health check

The festive season is rapidly approaching, and with it comes thoughts of how you’re going to fund the whole thing. It’s important to be on the ball, and giving your finances a pre-Christmas health check could be one of the best things you do.

Parents to spend £552 on children this half term

Autumn has truly arrived – and half term with it. This looks to be bad news for parents’ wallets, as research from American Express shows they will be spending an average of £276 per child this holiday break.