HMRC reissues warning over VAT fraud

HM Revenue & Customs has warned of ‘future attacks on the VAT base’
despite a push to minimise VAT losses through computer-based carousel fraud.

The drive has resulted in the total estimated VAT lost fall between £500m and
£2bn a year, according to

Tax credit fraud is currently between £1.58bn and £1.84bn, and the department
is confident efforts to reduce this figure are working.

The Federation of Small Businesses (FSB) has also expressed concern that some
companies do not have the necessary accounting systems to reinstate the 2.5% VAT
increase at the end of this year.

Accountants argue businesses could pay the incorrect amount of tax and face
being penalised.

Stephen Alambritis, of the FSB, said: ‘Companies will be suffocated by
further red tape as a result of the change and they will face crippling tax
fines if they get their tax wrong.’

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