HMRC has launched five VAT taskforces in the Midlands as part of an initiative to bring in over £100m in the current tax year.
The new taskforces will tackle fraudulent VAT repayments in the Nottingham, Birmingham, Stoke, Coventry and Wolverhampton areas.
VAT repayment taskforces have recovered more than £22m across the UK since 2012, the department said.
Jennie Granger, director general of enforcement and compliance at HMRC, said: “HMRC taskforces are deployed in sectors and areas where we've detected a high risk of tax evasion. People being targeted by our taskforces have no intention of playing by the rules and could end up facing a heavy fine or even a criminal conviction.
“In a previous VAT taskforce a trader who claimed to be exporting vehicles and second-hand white goods to Africa was found to have fraudulently reclaimed over £500,000 of input tax. He was sentenced to four and a half years’ imprisonment and was disqualified from being a company director for six years.
“If you haven’t declared all of your income, we will find you and investigate.”
HMRC taskforces expect to bring in over £100m during 2014/15. Seventy taskforces have been launched since 2011 and a further 30 are planned.
Builder ‘pocketed VAT’
HMRC also announced that a Belfast builder who pocketed £73,000 of VAT that he had charged his customers but failed to pass on to HMRC has been sentenced to 18 months, suspended for two years. John McDowell, aged 56, from St. Judes Crescent, Belfast, pleaded guilty and was sentenced last week at Laganside Court.
Mike Parkinson, HMRC’s assistant director, criminal investigation, said: “McDowell knew he was breaking the law when he deliberately failed to pay his taxes. HMRC takes tax fraud extremely seriously and anyone deliberately choosing to evade the taxes they owe should expect not only a heavy fine, but possibly a criminal prosecution as well.”
HMRC invites people who know someone who is evading taxes to contact its tax evasion hotline on 0800 788 887.