Fraud worries delay VAT refunds

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Increased worry about VAT fraud has led to a sharp rise in the number of that VAT refunds that HMRC has delayed.

Delays in VAT refunds to businesses rose by 44% in the last year, according to law firm Pinsent Masons.

Jason Collins, a tax specialist at Pinsent Masons, said that HMRC’s extra scrutiny of VAT refunds was due to the rise in UK VAT to 20% in January 2011, which made it more profitable for fraudsters to exploit European VAT law loopholes in the UK than in other major European countries.

VAT fraud in the UK had been on the wane, but the VAT rise may have reversed this trend, Collins said.

According to Pinsent Masons...

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About Nick Huber

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I’m a specialist business journalist and have a particular interest in tax and technology. 


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15th Apr 2013 15:58


Abolish VAT on inter business transactions. Vat only to be charged at point of retail sale.

This would not only simplify administration but avoid the main opportunity for fraudulent transactions.

It would however put a lot of civil servants out of a job so I doubt if it will ever happen !

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