Hi all. I have a client who acquired a business some time ago. A few months before her takeover, the business was visited by HMRC, and the investigation - VAT and Payroll, completed recently, with a massive VAT bill linked to the surrender of an asset to a related party by the previous owner (without Board approval). The asset surrender was hidden from HMRC by not disclosing through the accounts and not reporting as a disposal, therefore effectively evading VAT.
The current owner, in good faith, assisted HMRC wholeheartedly in their investigation and helped unearth the fraud, even launching an official complaint with the police's fraud squad.
What, if any, mitigation does my client have in view of the fact that she was not in any way party to the fraud and would the company still be liable to pay the VAT bill?
Any of you know any VAT specialists that may be able to help with the appeal/ defence? Any well establish consultant or firm that can assist with this?