The pressure on H M Customs & Revenue (‘HMRC’) to collect the maximum amount of tax from the business community is constant. Strategic plans are drawn up each year to enable HMRC to meets its targets, and HMRC’s efforts will be directed towards both compliant and also non compliant businesses, in other words, against the good guys as well as the bad guys.
The Customs and the Revenue arms of HMRC have a history of targeting particular trade sectors or market areas where their research has indicated an actual or potential leak loss of revenue. For example, Customs has regularly targeted the rag trade and cash businesses, whilst the Revenue has had some notable success in the catering and construction industries.
Customs is currently directing a significant amount of resources towards the mobile phone and computer accessories grey market as a result of enormous VAT losses arising out of missing trader and carousel fraud in these markets in recent years. Measures were introduced in 2003 to beef up Customs’ powers to obtain security from businesses with a history of VAT debts, or where a VAT loss was suspected, but more significantly, new joint and several liability provisions were introduced whereby any business in a supply chain became liable for a VAT loss occurring elsewhere in the supply chain. The need for businesses in these sectors to have robust due diligence procedures in place is now paramount, and our Team of former Customs fraud investigators can call upon their experience and expertise in these markets to assist any business to become fully compliant, whilst at the same time minimising the risk of incurring a VAT liability.
But the risk of incurring an unexpected VAT or duty liability can apply to other sectors. For example, any business involved in the drinks or tobacco industry, - whether it be in wholesale, retail, storage or transport, faces the risk of a substantial duty liability as a victim of fraud involving duty free stock. Any business involved in imports or exports will be closely monitored by Customs as a result of the significant losses of both VAT, customs duty and excise duty, and a liability can easily arise where your business relies upon third parties complying with the wide range of procedures and regulations applicable to the movement of goods in and out of the UK.
Our Customs Investigations & Litigation Team includes former Customs fraud investigators able to advise businesses on risk assessment procedures to help identify particular risk areas, and to minimise any VAT or duty liability.
If you would like to discuss how we can assist you in minimising the risk of a VAT or duty liability, please contact :
Allan Brown
Martin O’Neill