vat-fraud-investigation-service

VAT FRAUD INVESTIGATION SPECIALIST SERVICE

A VAT fraud investigation by HMRC is invariably an extremely stressful and unpleasant experience. Whether it is a VAT investigation launched by a Local Compliance Office or a full-blown VAT investigation launched by HMRC’s Serious Fraud Team, the impact on both business and family life cannot be underestimated.

VAT investigations are very much at the core of the work we do at Admiral Tax Investigations. In fact, we offer a bespoke VAT fraud investigation specialist service, which is comparable to anything currently available in the UK.

Former VAT Inspector

Our dedicated VAT fraud investigation specialist is a genuine former HMRC VAT inspector, who has honed his skills over many years within specialist government departments. That internal departmental experience is invaluable and when allied to a proven track record of success within private practice, Admiral are able to offer you a totally comprehensive service – regardless of the scale or complexity of the VAT investigation issue at hand.

Admiral Tax Investigations are happy to assist businesses of all shapes, sizes and structures. Whether it be a small/medium enterprise, or a larger corporation we should be your first port of call.

PERSONALLY TAILORED SERVICE

Our VAT Fraud investigation specialist service offers an unrivalled, personally tailored service to each client alongside a fee structure which means that every business can now afford the dedicated tax advice and support that they need. Listed below are just some of the VAT related services we offer:

VAT INVESTIGATION CRIMINAL PROSECUTION

The Board of HMRC operates a selective criminal prosecution policy when fraudulent conduct in relation to VAT evasion is deemed to be serious enough. There are many factors which determine whether a case could be referred to HMRC’s Criminal Prosecution Unit, principally the nature, extent and gravity of the offences perceived to have been committed.

Most VAT fraud investigations are conducted using HMRC’s civil evasion powers. In such circumstances, HMRC is invariably seeking a financial settlement. This settlement will include any tax lost, interest and a tax geared penalty. However, even if HMRC pursue a case using their civil evasion powers – early intervention by a VAT fraud investigation specialist is strongly recommended to reduce the impact upon your business.

Civil penalties can be extremely punitive – up to 100% of any VAT evaded.

LIMITED LIABILITY – VAT CIVIL EVASION PENALTY

Furthermore, limited liability does not necessarily protect company directors whose conduct is deemed to have contributed to any VAT evaded. In such circumstances, HMRC has it within their power to levy a civil evasion penalty against the director(s) concerned.

Penalties can be levied retrospectively against director(s) of liquidated companies and can be 100% of any VAT lost. Regardless of the nature of the VAT investigation being undertaken, Admiral VAT Fraud investigation specialist service has decades of invaluable experience which can be brought to bear on your behalf.

HMRC VAT Investigation – Inspection of VAT records

We understand the initial stress that a letter from HMRC informing you that a VAT investigation has begun brings. Whether that be via Code of Practice 9, via HMRC local compliance or a more innocent seeming VAT Inspection letter.

Maintaining adequate records to HMRC VAT standards can be incredibly difficult and frankly at times totally unrealistic. Not all businesses can afford a dedicated on-site bookkeeping resource and because of HMRC’s record maintenance expectations this can often lead to problems.

The first thing you need to bear in mind when receiving any form of VAT compliance contact from HMRC is that they already have a perception of risk. There is no such thing as an innocent friendly contact here. That may be self-evident when you receive a formal VAT investigation compliance check or a Code of Practice 9 letter.

However, the same applies to VAT on-site inspections. The language may appear to be customer service based; but the background and intention is precisely the same as a formal VAT investigation. HMRC clearly feel that something is wrong, and that VAT is risk. Like all HMRC tax investigations, a proposed on-site visit to check your VAT records is inevitably based on a thorough risk assessment prior to any form of intervention being launched.

Is an on-site visit necessary?

In the vast majority of cases HMRC will write to you or your business confirming that they wish to undertake a site visit to examine your VAT records for a specific period. It is vital that you seek specialist VAT investigation advice at this early stage. You should avoid any contact with HMRC before doing so. An on-site visit is not always a necessity.

We can offer advice on this aspect when you call us. However, should such a visit be appropriate it is important not to be panicked or pressured.  Our VAT Fraud Investigation Specialist will manage all of that for you and ensure that any visit is conducted at the best time for you. This could mean a postponement of visit to enable us to review the position for you in advance of any HMRC intervention. Any errors identified can then be volunteered to HMRC upfront.

This can have a key and beneficial impact on the conduct of the case and penalties. In more serious cases it could even help prevent the possibility of a criminal prosecution. You can read more about HMRC disclosures by following the links below:

Unannounced VAT fraud investigation visits

In some instances, HMRC may call on your business unannounced. The VAT inspector will produce an formal notice explaining that they have the right to access your premises and examine your business records. The notice should have been certified by a circuit judge.  do this which has been approved by a Judge. Please do not panic; HMRC do not have the right to ride rough shod over you or interrupt your day to day business operations. You should politely explain that a site visit is not convenient at this and that you intend to seek specialist advice.

FAQs

HMRC issues many thousands of VAT investigation letters each year out thousands of letters each year. The very thought of a VAT inspection can cause any busy business owner tremendous worry. The visit itself can be incredibly stressful and disruptive. Preparation is everything; so below we take some time to answer the most common VAT and investigation questions. As always, the very best way to communicate with us is to give us a call. We never charge for an initial no fluff, no nonsense consultation.

When do I need to register for VAT?

The current (2020 and 2021) VAT registration threshold is £85,000. This means that if you annual turnover breaches £85,000 then you must register for VAT. Remember that this is a rolling, organic total. So if at any stage during the year, you anticipate that your turnover will breach this amount, then you must register with HMRC and charge immediately. This is a legal requirement. You can always voluntarily register for VAT; even if your businesses turnover is below £85,000. You can read more about VAT registration by visiting the HMRC website.

Once registered with HMRC, you can also can also reclaim any VAT paid on the purchase of any goods and services.

Why I have been selected for a VAT Investigation or Inspection?

Make no mistake, any form of HMRC compliance intervention is not a random event. This includes VAT investigation visits; which are almost invariably driven by risk. Compliance work is expensive to undertake and is always underpinned by a through risk assessment. If HMRC are visiting your business to inspect VAT records, then you can be assured that they feel that something is wrong. That VAT has either been lost or is at risk of being lost.  The overarching purpose of a VAT inspection or investigation is to check if you are paying or reclaiming the correct amount of VAT. HMRC carry out risk assessments based around several factors. These include:

  • A comparison of your annual accounts with any VAT returns that you have filed
  • Information obtained from third parties
  • Comparative industry checks where they compare your VAT returns with other business in the same sector.
  • Informants information
  • An unusual spike in VAT repayments
  • A focus on higher risk business sectors
  • A poor history of VAT compliance

You can read more about HMRC investigation procedures; including by HMRC VAT fraud investigation teams by visiting our detailed guidance page

HMRC tax investigation process

What is likely to happen during a VAT investigation visit?

HMRC will always seek to visit your business premises; during which they will carry out an inspection of your VAT records. This can include:

  • Business diaries
  • Till rolls
  • Purchase and Sales invoices
  • Bank statements
  • Accountants working papers and annual accounts
  • Interrogating your chosen accounting software

WHAT SHOULD I DO IF I RECEIVE A VAT INVESTIGATION LETTER?

If you receive a letter from a VAT investigation fraud team or a letter from HMRC advising you of an upcoming VAT inspection, then you should seek specialist advice immediately. Your chosen VAT investigation specialist will be able to take any protective action needed in the first instance. That includes ensuring that your rights are protected. Any decent VAT investigation adviser will also be able to carry out their own risk assessment of your business and record keeping; thus, pre-empting any irregularities that HMRC may identify during an inspection of your records. It may that you need to voluntarily disclose these irregularities in advance of the VAT investigation visit.

You can read more detailed guidance on HMRC investigation letters by visiting our dedicated page:

Tax investigation letter

Will I be charged VAT investigation penalties if HMRC find something wrong?

That rather depends on the outcome of the VAT inspection or investigation. As mentioned above many errors can be mitigated if they are identified and disclosed upfront. Your VAT investigation specialist will be able to offer the advice you need. You can read our detailed guidance on penalties by clicking on the links below:

Penalties for UK tax fraud

Tax evasion penalties

After your VAT inspection has taken place, HMRC may arrange a meeting to discuss their findings. More likely is they will write to you detailing the nature, scale and impact of any problems irregularities they have identified.

Their decision letter will likely include:

  • Any record keeping or maintenance issues identified
  • Any corrections necessary to your VAT returns
  • An assessment of any VAT underpaid
  • Proposed penalty action

It is important to remember that all HMRC decisions can be appealed if you or your adviser do not agree.

What if I cannot pay following a VAT fraud investigation?

Many businesses find themselves in financial peril following a VAT fraud investigation or inspection. HMRC will invariably ask for payment of any additional liabilities immediately. It is vital that you seek specialist advice as soon as you are notified that a VAT investigation has begun. HMRC make mistakes regularly and you can quite easily find yourself the innocent victim by being asked to repay VAT that you do not owe. Even if you face a large VAT bill that you cannot pay immediately, your chosen VAT investigation specialist will be able to negotiate time to pay on your behalf. Insolvency should only be a last resort. You can read more about time to pay by visiting the HMRC website.

VAT fraud investigation help is here

Our VAT fraud investigation specialist has a proven track record when it comes to representing clients who are the subject of a VAT investigation. A dedicated VAT fraud investigation specialist will manage your investigation personally.

We ensure:

  • a proactive, front foot approach is adopted
  • you are kept fully informed at every stage
  • HMRC operate within the boundaries of published legislation
  • you get the best possible financial settlement

FREE INITIAL VAT INVESTIGATION ADVICE

For an initial no fee, no commitment consultation regarding your VAT investigation problem, contact Admiral Tax Investigations. We take great pride in the tax investigation advice that we give.