THE TAXMAN will this month target around 50,000 businesses that have failed to pay their VAT on time, warning that their tax affairs will be subject to scrutiny.
More than 600,000 businesses must file their VAT returns monthly, but some 50,000 are to be told that, from 28 February, their tax affairs will be exposed to greater inspection should they still have VAT outstanding. Some will have received an assessment of VAT for the periods in question.
The VAT Outstanding Returns campaign is aimed at businesses that have one or more VAT return outstanding, and have been told to submit their returns but are yet to do so. By using the amnesty and coming forward voluntarily, businesses may receive better terms, with any penalties imposed potentially lower than if HMRC contacts them first.
PKF VAT director Richard Wild said the approach marks a change in the way the taxman deals with non-compliant businesses.
He said: "Over the past few years, HMRC has launched a series of campaigns, which typically offered individuals the incentive of discounted penalties for voluntary disclosure alongside the threat of tough sanctions if they were subsequently caught out.
"Those participating in the Plumbers' Tax Safe Plan, for example, faced reduced fixed rate penalties of 10% or 20% of the tax owed, rather than the standard rates, which could exceed 70% depending on the severity of the offence.
"With this latest campaign, by contrast, HMRC seems to have focused on the stick, whilst leaving out the carrot altogether. As a result, it is little more than a veiled threat of an impending crackdown, rather than a proper campaign or amnesty, and it is therefore unlikely to have as much impact as previous initiatives."
Sign up for Financial Director email alerts
Please enter your email below to receive your profile link
Search by job title, salary, or location - we only list senior financial roles
Our panel of experts explore the major pension pain points and discuss what actions finance professionals should be taking in order to alleviate them
The first CFO Agenda, hosted by Financial Director at the Royal Society of Arts, was a roaring success
Send to a friend