HMRC is changing how it interacts with businesses and how it investigates. As the UK moves towards real-time reporting, tax issues will be identified and challenged with increasing speed and frequency.

VAT enquiries and risks

HMRC estimates that the Value Added Tax (VAT) gap was around £12.5 billion in 2017-18. We are seeing HMRC take an increasingly aggressive approach in relation to VAT errors, often asserting that underpayments have arisen through deliberate evasion.

VAT is at the forefront of HMRC’s digital transformation and we anticipate a closer focus on systems and records. Making Tax Digital (MTD) became mandatory on 1 April 2019 and most UK VAT registered organisations, with a taxable turnover above the registration threshold, are required to submit their VAT return data electronically via an appropriate Application Program Interface (API).

VAT rules are complex, with many risks of error and penalties. If you discover you have made a mistake, you must correct it.

We can:

  • carry out VAT health checks to check your processes
  • assist your transition to the new HMRC making tax digital regime
  • advise on adjusting errors on your current VAT return and accounts
  • help advise you during VAT inspections and interviews to ensure that these are dealt with efficiently
  • make unprompted disclosures to HMRC of any errors thereby avoiding hefty surcharges/penalties being levied.

Employer compliance

HMRC is changing how it undertakes employer tax compliance checks. Business can be approached by HMRC in a number of ways to check the operation of Pay As You Earn (PAYE), Benefit in Kind compliance, and national insurance contributions (NICs), and can be held liable for any under-deductions identified.

Common issues we are currently helping our clients address include challenges to employment status of workers (IR35), issues around the national minimum wage, benefits-in-kind, termination payments and overtime allowances and enquiries in umbrella and payroll companies.

We can:

  • carry out PAYE & NICs/CIS health checks to check your processes and compliance with Real Time Information (RTI) rules
  • carry out a readiness review for the April 2020 changes to self-employed status for private companies
  • help advise you during employer compliance inspections and interviews to ensure that these are dealt with efficiently
  • help you respond to information requests
  • advise on adjusting past errors, or make unprompted disclosures to HMRC of any errors thereby avoiding the issue of penalties
  • help you appeal assessments/determinations issued.

Get in touch with a member of the team to discuss how we can help.

Director David Francis

+44 (0)121 2325 425

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