Hundreds of businesses are being pushed to the brink of liquidation because
officials are withholding VAT repayments as part of the fight against carousel
Trade organisation the Federation of
Technological Industries (FTI) is seeking a judicial review on
behalf of genuine traders, which it says are being unfairly penalised by
HM Revenue & Customs
officials, The FT
The body claims the VAT repayments owed to traders could run into billions of
pounds. VAT repayments are normally due within 30 days, but have been delayed
for as long as 12 months as officials carry out ‘extended verification’ checks.
The government has conducted the checks to counter carousel fraud, and has
had some success with figures showing that the scourge, estimated to cost the
Treasury between £3.5bn and £4.75bn in 2005/2006.
The FTI, however, claims the VAT delays are ‘unlawful, disruptive and
predmeditated’. The FTI says is knows of at least 300 businesses waiting for
more than £1bn of repayments.
HMRC counters that its checks are proportionate and that its verification
procedures have been vindicated by a reduction in carousel fraud.
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The UK tax gap fell in 2014-15 to its lowest-ever level of 6.5%, revealed official statistics published today
"The whole idea of HMRC officials supplying confidential information about individuals to the media on a non-attributable basis is, or should be, a matter of serious concern," say Supreme Court judges
Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group