VAT

[McDermott]

Between the years of 2004-2009 my dad who works as plasterer sole trader earned over the VAT threshold and therefore should have been VAT registered and claiming VAT. Unfortunatly he didnt realise/was ill advised by his accountant and therefore didnt claim VAT on works carried out. As such he is now facing a tax bill for more than £40k. He has tried to go back to the companies he worked for and claim the VAT owed from them but most of the companies will not return his calls and as you can imagine are not very receptive when asked to pay VAT from years back, the company that he did most of the work for are longer trading. The reccession has also hit my dad hard and he just doesnt have anywhere near the ammount owed to to pay back the VAT which he is now getting red letter demands for it is looking like he may have to sell the house pay this. What grates more about this issue is that, if the companies paid the due VAT then they could claim this VAT back themselves?

If by some chance my dad can rasie/borrow the money and pay the outstanding VAT i read somewhere about ''vat bad debt relief'' http://www.hmrc.gov.uk/vat/managing/reclaiming/bad-debts.htm would it be possible to pay the VAT and claim back using this method?

Also another idea would it be possible to invoice a totally sepereate company/person for the outstanding VAT with that company/person claiming the VAT back themsleves. After all it is only the paper trail that the IR are interested in as the VAT that my dad should of claimed would of be claimed back by the payee?

These are just ideas i no very little about accounting/VAT so please dont reply if you just want to shoot me down for being being ill informed or to tell me how stupid my dad is for not claiming the VAT in the first place this will not help the sitution. Any productive advice on the options if any that are open to my dad would be really appreciated.


Also does anybody know of any reasonable accountants in the West Yorshire area that specilise in this field that my dad could talk to

[pawncob]

Firstly check HMRCs calculation of the VAT due. Is this an estimate or based on actual turnover?
Most VAT registered businesses are quite happy to accept catch up VAT invoices, even in the building trade, as there is no real cost to them, but if they've gone out of business, there's little hope.
Bad debt relief won't help you, it's for businesses which don't get paid, not those who haven't charged VAT .
If he invoiced a separate company he'd be committing fraud (as well as incurring even more of a VAT liability).
Your best bet is to get an accountant specialising in VAT to challenge HMRCs figures and try and reduce the amount demanded.