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New government figures indicate that a rise in VAT Investigations into British Businesses highlights, as promised, that HMRC is taking a tougher stance on tax evasion and tax avoidance.

Government data obtained under the Freedom of Information Act shows that following VAT investigations, UK businesses have paid a combined £1.34bn back to the public purse in the 2010-2011 tax year.

VAT investigations into UK businesses in 2010-2011 have trebled the amount of money collected, as only £443m was recovered in theVAT Investigations into businesses on the rise previous 2009-2010 tax year. UK businesses faced with a new VAT investigation also rose by 42 percent in the same time period.

The Telegraph reports that new VAT investigation figures ‘signal that HMRC is taking “a tougher, more aggressive” approach to compliance’ and that money collected from VAT investigations into businesses, in the 2010-2011 tax year, is the highest in the last five years for VAT compliance.

It is thought that the increase in VAT investigations into UK businesses has come as a response to businesses looking to limit their VAT liabilities, since the Chancellor raised VAT from 17.5 percent to 20 percent in January 2011.

VAT Investigations allow HMRC to investigate businesses’ records going back up to twenty years, in order to recover any VAT lost to the public purse through avoidance or VAT fraud.

HMRC also has the power to arrest someone, without a warrant, should they suspect that criminal VAT fraud, or the use of false documentation, has taken place.

VAT investigations can quickly lead to a criminal tax prosecution; a problem that can be avoided by appointing a VAT Investigation expert to act on your behalf from the outset.

Have you received a VAT enquiry from HMRC?

We can help!

The team at KinsellaTax consists of ex-Inland Revenue Inspectors and ex-Custom and Excise Officers, fully trained in VAT investigations and knowledgeable of HMRC tactics.

To make sure you are treated fairly by HMRC during a VAT Investigation, you should appoint a tax investigations expert to act on your behalf.

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