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VAT amnesty penatlies
Has HMRC announced how the scheme will work and whether there will be reduced penatlies for disclosure.
What about time to pay if the amount due is quite significant?
VAT Amnesty - unworkable?
I really don't see this is any different to the rules as applied today. If you 'own up' to HMRC there is a reduced penalty regime (15% normally) Are they suggesting a lower than 15% penalty? If you fail to advise HMRC and they come after you, the penalty increases substantially.
Is it me?
Why do we need an amnesty or indeed a "crack down" on this?
If non registered "customers" have been filing tax returns with turnovers above the VAT threshold why has it taken HMRC over 35 years to catch on?
I cannot believe that any non VAT registered businesses are filing tax returns showing turnovers over the limit knowingly as part of a tax dodge. These cases will be out of simple ignorance, so why not put on the CT600 and Self Assessment returns a box to enter your VAT reg if the limit is exceeded and a further box to complete to explain if you have not registered.
HMRC not fit for purpose?
Compared to a supposed 3rd world country (South Africa) HMRC is archaic, disorganised, inefficient etc.
It was a rule of thumb for accountants preparing year-ends to match VAT declared with final figures and to have full justifications on file (with payments made by client) when VAT amounts due were altered due to year-end adjustments because revenue computers automatically compared declared VAT sales with statutory accounts sales. Standard letter requesting explanations send. Any timing differences had to be fully explained in a schedule.
No explanation, flagged for non compliance (and more rigerous checks subsequent years) and fines.
VAT amnsety (which they had) was for the black market. But again they catch people as statutory requirement to declare all assets each year and these were automatically cross checked with bank data (required to be submitted by banks), land registry, DVLA equivalent, DOT (yachts) and Stock Exchange. They caught plenty!
Revenue authourities had specific persons responsible for files (always in major local offices) so revenue staff knew more about you than the accountants did. Any problem you could phone the person direct and sort the problem out over the phone in minutes. Not only that as local (or reasonably so in large cities) a visit sorted any problem out chop, chop except if fraud committed.
Not that it was all roses though. Averice reigned there too and there always were rotweilers and "difficult" staff. But you got away with little.
VAT compliance visits
The article suggests that there will be compliance visits for those consistently submitting tax returns showing turnover just below the VAT registration threshold.
This will be a waste of time for both the compliance team and my clients, as many businesses legally keep their turnover just below the VAT threshold level, becuase it is uncompetitve for them to VAT register particularly in the catering and sole-trader professional services businesses, selling to non VAT registered customers and clients.
Consistently below the threshold
Andrew,
You are right - but I am sure that the results will be productive for HMRC and so your compliant clients pay the price in terms of time lost dealing with HMRC.
BUT There is a culture in some of these trades that staying, illegitimately, unregistered is acceptable, that registration is somehow a matter of choice - I have clients who grind their teeth at being materially over the threshold and my telling them that they have to stay registered; they should eventually feel that my advice was right as some of their unegistered competitors face penalties.
In fact, some of these clients gain from VAT, as long as they are as busy as they could be anyway, the Flat Rate Scheme can be a "nice little earner" for them.