When was the last time you reviewed your VAT systems and VAT compliance in your business? A formal audit, year-end accounts or even book-keeping do not dig deep enough into the depths of VAT legislation to protect a business during a VAT inspection.
HMRC are focusing specifically upon the SME sector as this sector bears the juiciest of all the low hanging fruits. So juicy in fact, that in 2014/15 it collected £468m of VAT errors from SME’s and in 2015/16 that increased to £508m, estimates for 2016/17 indicate further increases.
It’s Christmas all year around for HMRC. The investment in the CONNECT computer system that HMRC has spent years developing, is starting to bear fruit as the data the computer system can analyse, is producing ever more accurate outcomes for HMRC to investigate.
CONNECT links several databases and uses algorithms to make judgements on which taxpayers to target. For example, we are seeing an increased focus on matching turnover shown on filed annual accounts with the figures reported on VAT returns. Any large differences between these two is likely to generate a VAT inspection. The sale of a property can now be matched to Land Registry records. A sole trader self-assessment return indicating income that appears to be over the VAT registration threshold can be acted upon.
Remember, VAT is not just for Christmas, it’s a long-term commitment
We offer VAT health checks, which are designed to identify and rectify potential VAT issues in your business before they are identified by HMRC. As penalties are higher where HMRC discover the error (prompted disclosure), the desire to know your business is VAT compliant grows ever more essential by the day.
In our experience, the VAT health checks will provide your business with peace of mind that the business is compliant with the VAT legislation, that potential issues are identified and dealt with and also identify potential ways to improve VAT efficiency and reduce the burden on the business.
So don’t leave your business at the mercy of HMRC, be proactive and give your business a VAT health check, enjoy the coming festive season knowing your business is protected should there be a VAT inspection and lets give HMRC sad tidings this Christmas.
If you want to discuss VAT, health checks or HMRC’s CONNECT system then please email us at Leicester@hwca.com or tweet us @haineswattsleic.
Want to know more? Call us on 0116 276 2761 or email firstname.lastname@example.org