VAT dodgers get last chance to come forward

Companies and business individuals trading above the VAT threshold without being registered for Value Added Tax have until September 30 to come forward, HM Revenue & Customs has warned.

Having started to scrutinise non-VAT registered traders whose turnover exceeds £73,000, HMRC said “most” of them would receive only a reduced penalty rate if they settle up, in full, before the date.

Traders who miss the deadline will not qualify for the lower rate (10 per cent on the VAT sum owed), and will be investigated, with the prospect of “substantial penalties and even criminal prosecution”.

“Most people do register for, and pay, the correct amount of VAT,” the Revenue added. “This isn’t about honest taxpayers, who have nothing to fear from any of our campaigns.

“But we are committed to ensuring tax is paid so that the maximum is available for public services used by everyone.”

To use the VAT disclosure facility, people and businesses must register with HMRC by 30 September to “notify” that they plan to make a voluntary VAT disclosure. They must also the department about VAT due and make arrangements to pay it, as well as any penalties due, by December 31.

HMRC said: “Those coming forward are invited to also disclose any other tax arrears. Where they have to pay a penalty on undeclared tax other than VAT, this will be lower than the customary penalty of up to 100 per cent charged to those who fall outside the opportunity.”