Below we outline what could happen during your VAT Investigation:
The normal time-limit during a VAT investigation to recover VAT lost due to criminal or civil fraud has now been extended from three years to 20 years through a failure to register or the unauthorised use of invoices.
HMRC have powers to arrest, without a warrant, anyone suspected of criminal VAT fraud or using false documents (Value Added Tax Act 1994 S.72 (9)).
Assurance was given that this power would only be exercised by specialist investigators and in the most serious VAT investigation cases.
Part of HMRC’s review of powers has sought views on applying the relevant provision in the Police and Criminal Evidence Act 1984 (PACE) across all of its activities.
Before the merger of Inland Revenue and Customs and Excise to form HMRC, these powers and associated safeguards were only available for specific taxes and duties.
But changes introduced in the Finance Act 2007 gave trained officers harmonised powers to apply for search warrants, production order and powers of arrest across all areas of taxes. All of which are subject to important safeguards which attach to criminal investigations generally.
The statutory record keeping requirements contained in the Finance Act 2008 sch.37 are supported by the information powers included under sch.36 and they apply to all taxes administered by HMRC including VAT.
There is no appeal against HMRC’s request to inspect the person’s records but the request would have to be reasonable.
This is a very complicated field, especially with the new Finance Act 2008.
KinsellaTax will deal with your VAT Investigation to avoid possible tax investigation penalties and criminal prosecutions.
If you are currently under VAT Investigation you need to contact KinsellaTax NOW on 0800 471 4546.