Posts tagged ‘Voluntary Disclosure’

HMRC now have powers to name and shame individuals and companies who deliberately evade taxes, by publishing their names, address and details of their evasion on the HMRC website.

New Powers

The law that provides HMRC with the power to disclose is included at Section 94 of the Finance Act 2009.  This ruling can be used by HMRC for accounting periods starting 1 April 2010, it therefore may take a little time before anything ‘juicy’ is made public.

ShameDeminimus

To be named and shamed the evasion must be deemed to be deliberate and involve tax of £25,000.



Preventing the embarrassment

A full voluntary disclosure of tax wrong doings without undue delay may help avoid the detail being published.

My thoughts

Once again HMRC have been given more opportunity to burden taxpayers with the subjective views of individual inspectors.

  • deliberate
  • undue delay and
  • ‘full’ disclosure

are all terms that I consider could be misconstrued or misrepresented and this allows different cases to be dealt with in different ways dependant on the mood, attitude or experience of the inspector.

If you are exposed to this new HMRC power, defending your position by challenging the inspectors opinion of your guilt may well be expensive and stressful.


The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

If you have discovered that you have underpaid VAT  to HM Revenue & Customs and are concerned what action you should take, read on. 

When did the error occur?

TaxHMRC are now able to look back at the previous four years records should they chose to carry out an inspection whereas previously they were only able to look at the previous three years.

The extra year is not all bad news it also means should you have made an error in your favour you now have an extra year to rectify it.

Declaring errors

For accounting errors beginning on or after 1 July 2008, businesses can adjust past errors on the next VAT return they submit providing the error is less than £10,000 or one per cent of the Box 6 turnover figure up to a maximum of £50,000. Any errors above these amounts must be notified to HMRC on a separate form.

Penalty charge noticePenalties

A new penalty system was introduced for VAT returns due to be submitted after 1 April 2009.  Penalties are now charged based on a percentage of the VAT payable.

If an error has been made but reasonable care has been taken then no penalty is applicable, but deliberate or concealed errors are dealt with more seriously and can attract a penalty equal to 200% of the VAT undeclared.


Honesty is always the best policy

Should you have made a mistake and are likely to incur a penalty then honesty is your best policy, as this can lead to a reduction in the penalty charged. But beware if you have already been notified of a visit by HMRC voluntary disclosure before they carry out their inspection will not reduce your penalty.

Evading VAT registration

Failing to register your business for VAT when it should have been can be costly.  Now that HM Revenue & Customs  manage direct and indirect taxes it is easy for them carry out checks with regards to business turnover.

The annual registration limit increased to £70,000 from 1 April 2010.

And finally,

Don’t forget, all new businesses and those with a turnover over £100,000 must now submit their VAT Return electronically. If you have not already registered make sure you do as soon as possible. Do not leave it until the day your return is due it will be too late. For more information click here

 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.