SolveVAT: Your Trusted Partner in Combating VAT Fraud situations call 0161 883 2120

 1. Understanding types of VAT Fraud

There are many examples of VAT fraud situations.  VAT fraud occurs when individuals or businesses deliberately manipulate the VAT system to gain a financial advantage which can take various forms, such as:

• False invoicing: Businesses create fake invoices to claim fraudulent VAT refunds or under-report their VAT liabilities.
• Phantom businesses: Fraudsters set up bogus businesses to collect VAT from customers and then disappear without remitting the tax to the authorities.
• Suppressing takings resulting in the under-declaration of Output Tax
• Submitting false VAT returns
• Carousel fraud: Also known as missing trader intra-community (MTIC) fraud, this involved, prior to Brexit, the import and export of goods within the EU, with the aim of exploiting the VAT system to generate illegitimate profits.

2. Identifying the Risks of VAT Fraud situations

Our team of VAT experts are adept at identifying the risks of VAT fraud within your business. We conduct comprehensive assessments of your VAT processes and systems, pinpointing areas of vulnerability and potential fraud risks. This enables you to address these risks proactively and protect your business from the adverse effects.

3. Implementing Robust Internal Controls

Our experts work closely with your team to develop and implement robust internal controls designed to prevent and detect VAT fraud. These controls may include stringent invoicing and payment processes, comprehensive record-keeping, and regular VAT reconciliations. Proper Due Diligence with regard to both suppliers and customers can be important in combating VAT fraud.  By putting these controls in place, your business can minimise its exposure and ensure compliance with VAT regulations.

4. Directors liability

If a company is accused of being involved in VAT fraud once HMRC have established what they believe to be the amount of VAT evaded a VAT assessment will be issued followed by a VAT penalty.  In such cases the amount of the VAT penalty can amount to 100% of the VAT evaded or sought to be evaded.   In certain circumstances a Director can be held personally liable for the VAT penalty.  HMRC are able to issue Directors with VAT Personal Liability Notices (PLN) which HMRC tend to vigorously pursue.

More information on VAT Personal Liability Notices.

On occasions individuals can be disqualified from being a company director for a period of up to 15 years.

5. Assistance with VAT Investigations

In the unfortunate event that your business, or you as a company Director, becomes the subject of a VAT fraud investigation, our team of VAT experts is here to provide expert assistance and guidance. We can help you navigate the complexities of a VAT fraud investigation, liaise with the relevant tax authorities on your behalf, and provide expert representation to protect your business’s interests.

Conclusion

Any investigation by HMRC can have serious consequences and we recommend contacting one of our VAT specialists to discuss the matter on 0161 883 2120 as soon as possible.

VAT fraud is a significant concern for businesses in the UK, but partnering with our VAT specialist team of VAT experts can help you effectively combat it and ensure your business remains compliant with VAT regulations. Our comprehensive approach, from identifying risks and implementing robust internal controls to providing ongoing monitoring and support, ensures that your business is well-equipped to tackle VAT fraud head-on.

By working with our VAT specialists, you can protect your business from the financial, legal, and reputational consequences of VAT fraud, allowing you to focus on growth and success. Contact us today to learn more about how our VAT experts can help you safeguard your business.

If there is an allegation of VAT fraud the onus of proof rests with HMRC to prove the case.  Many different aspects will need to be considered if faced with such an allegation such as “knowledge”, is the VAT assessment correctly made, correctly calculated and made in time.  Our trusted VAT experts can ensure your position is protected as much as possible.