VAT registration on an employee

Employee has recieved a VAT registration

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A very strange scenario..

An SME client emails me with with a letter from the VAT office that an employee has recieved 1 penalty point for the non filing of a March VAT return.

The letter states a valid VAT number and address under her name (I checked this).   The employee of the SME is not VAT registered and does not run a business.  She is employed full time by the SME. 

I have stated that it very much sounds like a use of her name and address,  ie, contact the VAT office as a fraud.      How or why would such a thing occur ?

Anybody else come across this,  any relevant numbers to call or what to do ?

I have said Action Fraud and the VAT office so far.

Replies (28)

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the sea otter
By memyself-eye
29th May 2024 09:52

Send it back from whence it came with a note advising no knowledge of any such registration.
As for 'action fraud' you are better off notifying 'action man'
(for those old enough to remember him)

Thanks (7)
Replying to memyself-eye:
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By Paul Crowley
29th May 2024 11:58

+1
No point whatsoever

Thanks (3)
Replying to Paul Crowley:
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By FactChecker
29th May 2024 12:49

Action Fraud are a new 'higher-class' of black hole.
They obey the usual rules (traffic is one-way and what goes in can never leave), but they also decide what NOT to let in - which includes anything being attemptedly reported by a person who is unable to demonstrate direct personal financial loss.

They are also one of those rare examples of where 'what it says on the tin' is applied inversely ... given that they've no interest in Fraud nor any intention of finding out what Action means.

Thanks (4)
Sandman
By Mr Sandman
29th May 2024 10:05

An ex-Ltd client of mine was struck off by Companies House.
The Ltd owed VAT & hadn't submitted VAT returns.
HMRC are now addressing demands for the o/s VAT & VAT Returns to an ex director.
Your case of the employee receiving letters from HMRC, like my example is either a clerical error, or bluff.

Thanks (3)
Routemaster image
By tom123
29th May 2024 10:23

If the employee is a victim of identity fraud (it happens..) how have they joined the employee to the company address / or the company to the employee address?

I think the employee needs to sit on the phone to the VAT office, for as long as it takes, to try and find out more.

Thanks (2)
Replying to tom123:
None
By FCExtraordinaire
29th May 2024 10:42

It was a name to the personal address, not the company that they work in.

Thanks (0)
VAT
By Jason Croke
29th May 2024 10:54

Clearly fraudulent and so report to HMRC so that at least any liabilities aren't clocking up against the employee.

To do a sole trader VAT registration online, it asks for name, date of birth, address and NI number....so whoever did this knew these details.

The online process also asks you to verify those details by asking for a UTR or details of your last P60/tax return. It checks these details during the online process so if any of the details don't match HMRC records, then it will not proceed to the submission of the VAT application.

You can override this and not give any P60 details but then it should be manually checked by HMRC, so it's quite difficult, in my mind, to register a sole trader for VAT.

Slightly left field but someone from payroll would have all these details, so is there a prank or malicious work based thing going on?

Thanks (10)
Replying to Jason Croke:
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By johnjenkins
30th May 2024 10:00

Unfortunately, Jason, these scammers can get bank accounts etc. when the ordinary person has to jump through hoops.

Thanks (2)
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By mumpin
29th May 2024 11:18

I had something similar happen with a tradesman who is semi-retired.
Even when he was active he barely exceeded £50k t/o in a year.
Never been vat registered.
Suddenly started receiving Vat correspondence.
I registered as agent, then phoned Vat helpline, got transferred to Fraud team, got a fraud reference no. etc
You need to stop it before assessments start flying around, then debt collectors...

Thanks (3)
VAT
By Jason Croke
29th May 2024 11:20

.

Thanks (0)
Routemaster image
By tom123
29th May 2024 11:28

I mean, there is an outside chance the employee has a "side hustle" on the go they haven't spoken about - I suppose..

Thanks (3)
Replying to tom123:
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By Rgab1947
30th May 2024 11:02

£85,000. Big side hustle.

Thanks (0)
Replying to Rgab1947:
Routemaster image
By tom123
31st May 2024 08:14

Could be B2B and voluntary registration?

Thanks (0)
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By Rgab1947
30th May 2024 11:01

1 penalty point?? HMRC does not do a "penalty point"

This is a fraud.

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Replying to Rgab1947:
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By mumpin
30th May 2024 11:04

I think HMRC does do 1 penalty point for not submitting a return on time.

Thanks (1)
Replying to mumpin:
VAT
By Jason Croke
30th May 2024 11:26

Agree, failure to file a VAT return = 1 penalty point, fail to file 4 VAT returns on time means you reach 4 points and a £200 penalty.

So important for the employee to contact HMRC and report this, else at some point HMRC will send debt collectors around to collect a fictitious debt.

Thanks (0)
Replying to Jason Croke:
the sea otter
By memyself-eye
30th May 2024 20:25

Wow, £200 four four missed returns. The criminal fraternity must be quaking in their boots.
Reminds me of a schoolteacher at my borstal class who threatened a 'ten minute' detention to an unruly class I was in.
How the class laughed.
Right he said... 'twenty minute detention'
They (we) laughed even more.
He left teaching soon after - maybe to join HMRC.....

Thanks (2)
Replying to memyself-eye:
None
By FCExtraordinaire
30th May 2024 21:08

As I understand it, all returns need to be filed on time for 12 months after this otherwise there are more sanctions. But agree, hardly a deterrent.

Thanks (0)
Replying to Rgab1947:
None
By FCExtraordinaire
30th May 2024 21:09

The system has changed since Jan 2023.

Thanks (0)
VAT
By Jason Croke
30th May 2024 11:28

I wonder if we will see more of the "sole trader" registrations?

Companies House, sort of cracking down on all those overseas scammers registering a hundred NewCo's to a flat in Wales, those ID checks are going to be difficult to circumvent once CH's gets their full act together.

Thanks (1)
Replying to Jason Croke:
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By Roland195
30th May 2024 11:41

I'm not sure I understand how the registration was effected in the first place - I registered a sole trader for VAT a couple of weeks ago & struggled even with all the details readily available including a UTR.

I can't think off the top of my head a circumstance where VAT Registration is required without a UTR being necessary - maybe the VAT Office are more pragmatic about the timescale for their colleagues issuing one?

Thanks (2)
Replying to Roland195:
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By FCExtraordinaire
30th May 2024 20:53

It transpires that they were once registered as self employed, since given that up to be an employee.
Beggers belief when you don't get any contact for weeks if you put a legitimate registration in though !

Thanks (1)
Replying to FCExtraordinaire:
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By Roland195
31st May 2024 10:19

Does that not raise more questions than it answers?

A UTR number for an individual would be known to a limited number of people so how did someone get access to it plus enough of the other personal & current details to successfully register for VAT?

What would be the motivation for fraud - If it is simply to obtain a valid VAT number for the purposes of online trading?

Thanks (0)
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By Vallery Lee
31st May 2024 07:34

I have received several letters stating that I have not submitted VAT returns (I am no longer VAT registered) quoting different VAT registration numbers!! I phoned HMRC and the person I spoke to could shed no light. The latest was a late payment penalty dated 27th April 2024. I have ignored it.

Thanks (0)
Replying to Vallery Lee:
VAT
By Jason Croke
31st May 2024 08:05

Vallery Lee wrote:

I have received several letters stating that I have not submitted VAT returns (I am no longer VAT registered) quoting different VAT registration numbers!! I phoned HMRC and the person I spoke to could shed no light. The latest was a late payment penalty dated 27th April 2024. I have ignored it.


Really good website, yes there are a few adverts, but you input the VAT number and it will tell you who the number belongs to, address, date of incorporation, etc. Think it lets you do 3 or 4 searches for free per month, so switch to your mobile data to search for another 3-4.

www.vat-search.co.uk

Also for those who do VAT registrations, this website will show the VAT number being issued as soon as HMRC issue a VAT number on HMRC's database, so this means you know your client VAT number about 10 days before you get the letter from HMRC, so I use this website, checking my client name and I can get ahead of things before HMRC even start printing paperwork out.

Thanks (3)
Replying to Jason Croke:
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By taxdigital
31st May 2024 08:32

It’s a useful link. I presume they may be getting all the data following insertion of this piece in to the legislation (https://www.legislation.gov.uk/ukpga/2015/26/section/8).

Coming to the OP, hope they’re acting for the employee as well, to be able to advise them. I’ve seen clients receiving VAT refund orders when nothing was due, but can’t believe HMRC would register a person without someone applying, particularly post the Aug 2022 regime checks. Anyway if the employee didn’t apply for registration obviously there are no penal consequences.

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Replying to Jason Croke:
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By bettybobbymeggie
31st May 2024 09:21

+1 for this website which I used for gathering lists of local businesses for mailshots. Especially useful in combination with DEFRA farm subsidy payments data if you want to target farmers. That said, 3-4 a month is very tight - they used to give you far more than that per day IIRC.

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By johnjenkins
31st May 2024 12:06

Had to laugh this am. Got an e-mail from HMRC asking if I wanted to join a seminar to learn the workings of VAT, what to do and what not to do.

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