HM Revenue & Customs (HMRC) has announced an initiative to crack down on VAT rule breakers. The new campaign will focus on businesses who are trading above the VAT threshold but who have not yet registered for VAT.

The initiative is being discussed with interested parties to ensure HMRC has as much information from them as possible before launching the campaign later in the summer.

Mike Wells, HMRC's Director of Risk and Intelligence, said:

“Our aim is to get as much input as possible into our future campaigns so that the views and experience of people and organisations outside the department play a fuller part in what we design for customers.

We are already in contact with a number of interested parties and I expect many more to contact us with their views before we finalise the design of the VAT initiative.

This will be the model for all our future campaigns and we look forward to being even more open about the compliance activity HMRC is undertaking to ensure we reduce the tax gap and help customers pay what they owe.”

Each HMRC campaign is aimed at reducing the tax gap by focusing on areas where a significant underpayment has been identified. The department provides simple, straightforward opportunities for customers to put their records in order on the best possible terms, followed immediately by activity focused on the non-compliant who choose not to take up the opportunity. HMRC has raised over £500m from voluntary disclosures and a further £100m so far from follow-up activity.

Previous campaigns have targeted offshore investments, medical professionals and people working in the plumbing industry. For each, HMRC has used new technology and legislation to gather and analyse data, from internal and external sources, to identify people who should come forward. This has provided thousands more investigations, now being worked through, including a number of criminal investigations.

To join the VAT Initiative discussion, individuals, organisations or businesses should contact Nicky Prys-Jones ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).

Note

The VAT threshold is currently £73,000 turnover on a rolling annual basis.

In previous years it was:

2006/07 – £61,000;
2007/08 – £64,000;
2008/09 - £67,000;
2009/10 - £68,000;
2010/11 - £70,000.

HMRC encourages anyone who has unpaid tax to come forward and make a voluntary disclosure; it will always be less expensive if customers come to HMRC voluntarily rather than wait until we catch up with them.

Anyone working in the plumbing industry who has unpaid tax should contact HMRC on 0845 600 4507 before 31 May to register their intention to use the Plumbers' Tax Safe Plan  - see Introduction to the Plumbers' Tax Safe Plan

Anybody targeted by a previous campaign will not be able to use a subsequent campaign to disclose liabilities.

Summary information on existing and future campaigns activity will be available shortly on the HMRC website.

HM Revenue & Customs (HMRC) has announced trials of a Single Compliance Process for enquiries across a range of different taxes.

By simplifying and standardising the process for compliance checks HMRC will "improve customer experience" and reduce costs as the check will only take as long as the risks and behaviours encountered dictate. 

The trials of the new process will run for six months from 1 June in 10 different locations across the UK:

Reading/Slough,
Newcastle,
Warrington,
York,
Exeter,
London Euston and
Southampton in England;
Cardiff in Wales;
Belfast and
Edinburgh/Dundee.

The new process will be rolled out nationally from January 2012, subject to the results of the trials.

David Gauke, Exchequer Secretary to the Treasury, said:

“This Government is committed to relieving the burden on businesses. We know that agents, individuals and businesses find some of HMRC’s current compliance practices drawn out and costly. A Single Compliance Process could help HMRC improve the customer experience and reduce costs.

HMRC is working directly with agents via the Compliance Reform Forum to help develop it, and will continue to work with them during the pilots.”

The Single Compliance Process will focus solely on the risks and behaviours identified in cases and throughout the life of the compliance check, irrespective of the head of duty (VAT, Income Tax, Corporation Tax and PAYE) involved. The process will be capable of addressing lower risk cases at an appropriate level, but will also increase in intensity should the approach be warranted.