SHEFFIELD company VAT Solutions is advising businesses not be browbeaten by the VAT man.
Recent cases show that when an underpayment of VAT is identified by HM Revenue & Customs during an inspection they will automatically make use of the existing penalty regime to impose an extra penalty that could be as high as 100 per cent.
But the latest research suggests that many of these penalties are not justified.
And statistics released under the Freedom of Information Act demonstrate that out of 28,912 internal VAT reviews undertaken by HMRC between April 2009 and September 2010, 16,270 were overturned – a staggering 56 per cent!
“HMRC suggest that the penalty process is automatic and that they review them afterwards, should the taxpayer choose to query the penalty and provide an acceptable excuse,” says Robin Simpson, of Nether Edge-based VAT Solutions.
“This current HMRC approach turns our whole justice system on its head,” Robin says. “Whatever happened to innocent till proven guilty?’’