Value Added Tax (VAT) fraud in the UK can be committed by individuals or businesses. It can occur among enterprises that deal with cash as well, as they may collect tax but not pay it to the HMRC. There are various examples of VAT fraud, and it can carry some serious penalties in some cases. These penalties can ruin your business or your personal life. Thus, it is imperative to hire VAT fraud solicitors that can help you minimise the damages. So, this article discusses this type of fraud in detail, explains what your options are, and highlights why it’s crucial to have only experienced lawyers represent you in such cases.
VAT Fraud in the UK
It’s crucial to understand that failure to pay VAT whenever it is required is a crime. Therefore, the HMRC can have you charged with VAT fraud. Here are two categories of VAT fraud regarding different parties.
VAT Fraud Regarding Businesses
If you have a business, here are some reasons that could lead to your company and consequently you being charged with VAT fraud.
- Your business asks customers to pay cash instead of digital payments to avoid having any recorded evidence (other than their own) of items sold
- The business has customers make payments to an individual or one or a series of other companies instead of the business itself when purchasing a service or product from said business
- Failure to be registered for VAT
- The VAT number being used by the business is fraudulent or belongs to another enterprise
- The business creates bogus enterprises to seek rebates without returning any tax collected to the HMRC
With cash payments, tax amounts may be collected but may not be provided to the HMRC. It’s also important to note that some of the instances above are not necessarily examples of VAT fraud, but they are situations that could easily lead to this type of crime.
VAT Fraud Regarding Individuals
Below are some reasons that could lead to you being charged with VAT fraud.
- Claiming to possess a VAT number (even those who claim to have applied for a VAT number but do not yet have one are committing VAT fraud)
- You are not registered for VAT (Sole traders that earn more than £85,000 must register for VAT as per the law)
- The VAT number being used by you is fraudulent or belongs to another
- You create bogus enterprises to seek rebates without returning any tax collected to the HMRC
Why You Must Hire Experienced Solicitors
None of the lists of examples above is exhaustive. Thus, there may be additional instances where you may be charged with VAT fraud in the UK. Therefore, the first thing to do is to hire solicitors experienced in VAT cases. Thus, they can inform you about the nuances of such cases and offer a defence strategy that can help get the most positive outcome.