Please excuse me not providing a name but I wish to protect my identity.
I recently left a practice that I believe was committing VAT fraud. No returns have ever been submitted (there was a glitch in setting up the VAT registration) but the company is still collecting VAT from customers. Bearing in mind they turn over well over £1m that's an extreme amount of money.
I think the VAT owing when I left was around £630k but HMRC aren't chasing or sending reminders even though returns have never been submitted.
I don't believe the liability is shown on the accounts when they're submitted to CH - the VAT debt is removed I think so the balance sheet is kept positive.
The director is well aware but turns a blind eye, hiding behind 'limited liability'.
I know I should report it but when you report fraud to HMRC you need to give your details which I don't want to do - what should I do?
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Replies (16)
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"I think the VAT owing when I left was around £630k but HMRC aren't chasing or sending reminders even though returns have never been submitted."
Surely you mean instead that "....probably since returns have never been submitted."?
"I think the VAT owing when I left was around £630k but HMRC aren't chasing or sending reminders even though returns have never been submitted."
Surely you mean instead that "....probably since returns have never been submitted."?
I did mean that yes - apologies!
You have just lost your anonymity. You might like to speak to the mod team to sort it for you.
This is one case where use of the anon feature is appropriate.
Possibly - but in my experience HMRC are pretty sharp in issuing (and chasing) VAT assessments in absence of returns. But that presumes that the company did manage to register successfully.
What VAT number do they put on invoices ?? Is it a made up one as customers are bound to ask for it
yes that was going to be my question too? Though if it is via a market place (ie sales through paypal etc) the amount can be shown gross and no vat receipt produced. But if a vat invoice is produced, then the breakdown must show the 20% and vat number - though sales to customers rather than business may not raise a question.
Had an emergency plumber once who having done a crap job then provided an invoice with vat but no vat number. I asked him what his vat number was and he said -'tell you what as it's Christmas I won't charge you the vat' !!!!
Online reporting form is here
https://www.gov.uk/government/organisations/hm-revenue-customs/contact/r...
Although there are fields for name and contact details of person making report, these are not mandatory.
So where have they put the 630k credit balance , in a cupboard ?
So how does the balance sheet balance?
Posting the erroneous VAT charged to Directors Loan a/c will if not already, lead to a debit Balance of that loan account which the directors will be subject to tax.
Reducing the value of a sales invoice could quite easily be hidden by posting a corresponding debit to ‘discounts allowed’ in the P&L.
I've heard before of a chartered accountant doing this. He used a fake vat number on his invoices and wasn't vat registered. When the revenue came knocking he drained the bank accounts and did a runner. Ironically he only got caught because his own client was having a vat inspection. I'm interested to know how he treats the fake vat though. Does he keep it on the balance sheet or wash it through sales? Asking for a friend lol
Depending upon the circumstances you might be under an obligation to submit a Suspicious Activity Report to the National Crime Agency, under s330 Proceeds of Crime Act 2002.
You could do that online, but not anonymously. Having said that the NCA are (understandably) careful to preserve the confidentiality of reporters!
David
If you were aware of any VAT infringement or discretion whilst you were employed by the company/practice, you are also personally complicit in any infringement that is/may have occurred. If you’re a member of a professional body, you will also be/have contravened the codes of practice of that body.
Limited liability is a misnomer as I have known HMRC to pursue the Directors of a company personally.
My opinion: you should report the organisation and mitigate your own exposure to any infringement penalties that may ensue.