VAT investigations need to be properly dealt with by experts who know what they are doing. They are hugely stressful to those involved and can kill your business. The potential for reputational damage and even custodial sentences mean that ensuring a positive outcome is paramount. 

HMRC can prosecute businesses and individuals for under-declaring VAT and penalties can be issued personally against officers of businesses if HMRC establish guilt. Whilst most cases are dealt with by civil procedures under tax legislation, prosecution is still a real threat. It is vital that control and correct advice is provided at an early stage, because getting it wrong early on often means that it is impossible to regain credibility with HMRC later on.

In terms of penalties, the level of penalty imposed depends on appropriate cooperation from the start. Poor advice on the level of cooperation can result in substantially higher penalties and assessments. When HMRC request information, giving HMRC everything they ask for is not always the right thing to do – HMRC are renowned for embarking on “fishing expeditions” when they hold little or nothing to go on and we have direct experience of defeating oppressive and unreasonable information notices. On the other hand, advisers who insist on “putting a show on” for the client only serve to annoy HMRC and close off those avenues of negotiation which depend on maintaining goodwill! Because of our experience, our team has developed the right approach for each situation. Our preference is to maintain a healthy dialogue with HMRC, but where we have to disagree with HMRC, our clients can be assured that nobody will fight harder for them.

We are experts on procedure, interviews, preparing disclosure reports and negotiating settlements and we frequently provide technical assistance to solicitors and accountants with clients subject to such VAT investigations and other tax disputes.