HMRC target small businesses
As part of HMRC’s programme of work to identify and encourage individuals and businesses to voluntarily disclose and pay outstanding tax liabilities, a new campaign has been launched targeting those who are trading above the VAT threshold of £73,000 turnover but have not registered to pay VAT.
Using information from internal HMRC sources and external private/public third party sources an initial target list has been identified and, over the next few weeks, some 40,000 letters will be sent out advising businesses how to register to pay what they owe. Those who have not registered to pay VAT can come forward at any time up to 30 September and, if they make a full disclosure, should only face a low penalty rate of 10%. They will also be invited to disclose any other tax arrears, and then tell HMRC what tax is owing, and make arrangements to pay it (and any penalties due) by 31 December.
After 30 September HMRC will investigate those who have not come forwards and, if found liable, they could face substantial penalties of up to 100%, or even criminal prosecution.
Robert Leggett, Tax Partner at Ensors Chartered Accountants, said “This is the fourth campaign run by HMRC since they started this initiative in 2007 with a further three already planned for later this year and early 2012. Previous campaigns have targeted offshore investments, medical profesionals and those working in the plumbing industry and have proved to be very effective in collecting revenue.” He continued, “HMRC have invested in some sophisticated technology that facilitates the distillation of large amounts of information into meaningful data. It is this that is predominantly driving the success of these campaigns.”
For further information visit HMRC VAT campaigns.
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