VAT Investigations & Disputes with HMRC

If you've received notification of a VAT Investigation, or are in a dispute with HMRC, we can help

 

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VAT Investigations

VAT investigations are usually prompted if a routine VAT inspection reveals irregularities, as a result of declarations that are out-of-pattern or if you work in what HMRC deems as “a high-risk sector”.

Intervention and inspection by HMRC can be started by anything from a pre-notification of an enquiry, to an unannounced, on-site inspection. You may possibly be required to produce documents for inspection and maybe for removal by HMRC. You may also be required to attend interviews.

We recommend that you get in touch with our VAT Team as soon as you hear from HMRC, so that we can assist you through the process.

Once HMRC have finished their investigation, they may present you with a penalty. However, with our advice, there may be a chance to reduce these penalties, structure a more favourable payment plan, or if you have a one of our VAT Health Checks prior to any contact from HMRC, to avoid this situation altogether.

Penalty rates for inaccurate VAT Returns
The penalty rates for an inaccurate VAT Return depends on the reason why you made the error. The more serious, or malicious the reason, the larger the penalty will be. The penalty is worked out as a percentage of the tax that is unpaid, understated, over claimed or under-assessed as a result of your errors. You will also have to pay the VAT an any interest that is due in addition to the penalty.
Careless (you fail to take reasonable care)
Minimum Penalty (as a % of the tax) Maximum Penalty (as a % of the tax)
Unprompted: 0% 30%
Prompted: 15% 30%

 

Deliberate (you give HMRC a document you know contains an inaccuracy)

 

Minimum Penalty (as a % of the tax) Maximum Penalty (as a % of the tax)
Unprompted: 20% 70%
Prompted: 35% 70%
Deliberate & Concealed (you give HMRC a document you know contains an inaccuracy and you have tried to hide that inaccuracy)
Minimum Penalty (as a % of the tax) Maximum Penalty (as a % of the tax)
Unprompted: 30% 100%
Prompted: 50% 100%

Concerned about your VAT? Get a Health Check & Get Ahead

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