New procedures – to be trialled for 12 months in three Customs regions – will replace formal investigations with an invitation to traders to disclose their unpaid VAT in return for a reduced penalty.
At the same time, the #75,000 prosecution threshold – the level at which VAT evaders can expect to be prosecuted through the criminal courts – is to be abolished, allowing more cases to be dealt with using civil procedures.
Tony Walker, head of Customs’ VAT anti-fraud strategy team, said: ‘The changes are aimed at both accountants and traders but in the early days we would expect there to be a positive reaction from the accountancy profession.’
Traders suspected of evasion will be notified by Customs and invited to prepare a full disclosure of the unpaid VAT.
If Customs agrees the disclosure the trader will face a maximum penalty of only 20% of the VAT arrears.
Under the old system, traders could face penalties equal to 100% of their arrears, which could be decreased to a minimum of 25% under mitigating circumstances.
Phil Jeffrey, a VAT advisor at Pannell Kerr Forster, warned that the new approach could free up time for Customs to carry out more investigations.
Crowe Clark Whitehill , the top 20 accountancy firm, has announced the promotion of Chris Mould to partner
The latest opinions from Accountancy Age on Making Tax Digital, and outline plans to evolve the UK's corporate governance regime
Five million taxpayers are ow using digital personal tax accounts (PTA) as part of the making tax digital strategy, HMRC said
UK-based non-doms have paid ten times more tax than the average taxpayer, raising concerns over the Brexit impact on non-dom contributions and therefore, the economy