HMRC VAT Investigation Help 

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A VAT Investigation is launched when HMRC have concerns about a company’s VAT position. A VAT Investigation is potentially a very serious matter and you should seek expert advice as soon as possible.

Although its’s difficult to identify exactly why HMRC has initiated a VAT investigation, there is one obvious reason: HMRC believes that the businesses VAT returns are not accurate or incorrect.

If you have an up-coming VAT investigation and are concerned about what might find (whether deliberate or non-deliberate) then you should not wait until the investigation takes place before contacting an advisor.

During the investigation process, HMRC will look closely at how the business accounts for VAT (its processes). HMRC will also assess whether the correct amount of VAT has been charged and reclaimed. It’s extremely unlikely that any attempt to ‘cover-up’ inaccuracies, or conceal deliberate errors, will be successful.

However, if you don’t agree with HMRC’s findings or have deliberately mis-claimed VAT then there are very effective appeal procedures.

Deliberate VAT errors

If you have deliberately falsified your VAT returns then, depending on the severity, a voluntary disclosure may be appropriate. This is usually under the Contract Disclosure Facility – also known as Code of Practice 9. A disclosure under Code of Practice 9 (COP9) offers complete immunity from criminal prosecution. In return, HMRC will expect a full and honest disclosure.

T M Sterling specialises in COP9 and we offer a free initial consultation to anyone in this position. Please click to learn more about COP9 and the Contract Disclosure Facility. Alternatively, please call us to arrange a free consultation.

The VAT Appeals Process

Following the businesses VAT investigation, HMRC may issue a ‘VAT Assessment’. This is a formal request that aims to recover the VAT that HMRC feels it’s owed.

What if you don’t agree with HMRC’s findings? i.e. you don’t feel that your business owes the money. In this scenario there is a well structured appeals process that can help. You will have a very limited amount of time to appeal HMRC’s decision and it’s therefore important to act quickly. At T M Sterling we are well positioned to manage the process from start to finish. This means that you will need to have little or no direct contact with HMRC.

Stage 1: Independent Review

The first stage in appealing any HMRC VAT assessment in the Independent review. In simple terms, this involves your case being passed to another member of the HMRC VAT team for their re-appraisal.

Unfortunately, due to the review taking place within HMRC, an independent review is often unsuccessful in overturning the VAT assessment.

Stage 2: Appeal to First Tier Tax Tribunal

T M Sterling will progress the appeal to First Tier Tax Tribunal (FTTT), if the independent review is unsuccessful. The FTTT are completely independent of HMRC. First Tier Tax Tribunal will offer a decision on the case based on the ‘balance of probability’.

Progressing a case to the FTTT can be somewhat complicated. It’s recommended that you instruct a company such as T M Sterling to manage the process for you. As part of the instruction, we will also represent you on the day of the hearing.

The FTTT  is where we have most of our successes in overturning a HMRC VAT investigation decision. In part, this is due to its independent nature.

VAT Investigation – Moving Forwards

If you need advice or representation in relation to any VAT situation, then please get in touch. You can call us, or send us a message using the contact link. Out initial VAT investigation advice is always free and will give you clarity on how to effectively progress matters.

Should you choose to instruct us following your free consultation, then we offer fixed-fees and flexibly payment options.

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