If you have reason to believe someone is evading taxes, you have a responsibility to report VAT fraud. If you don’t know how to report VAT fraud, read our brief guide which aims to answer FAQs for things to consider, the definition of VAT fraud, how to report it safely and what to do if you’ve been reported.
What is VAT fraud?
First things first, what constitutes VAT fraud? VAT fraud is a form of tax evasion which refers to the act of avoiding charging or paying VAT when the business in question should be. Signs a company might be evading VAT include:
- Not being registered for VAT when they should be
- Dealing with cash only
- Asking for indirect payments or payments dispersed across different names
- Using an invalid or incorrect VAT number.
Neglecting to notify HMRC of VAT fraud you’re aware of could result in you having to pay the tax.
How do I anonymously report VAT fraud?
Understandably, you might wish to make the fraud report anonymously in the interest of personal safety. It is perfectly acceptable to make the report without giving your name – this can be done online or by telephone.
HMRC recommends further safety guidelines to keep in mind for your protection:
- Don’t tell anybody that you’re reporting the activity
- Don’t take it upon yourself to find out more about the activity
- Don’t encourage anybody to break the law with the intention of finding out more information
What is the process for reporting VAT fraud?
If you choose to report VAT fraud online, you’ll be asked to complete a form with five sections which cover. Even if you can’t complete them all, HMRC encourages you to fill as much in as possible. While you don’t have to disclose your personal details, it is helpful to provide information about your connection to the business in question and how you have come to discover they are not charging or paying VAT.
What to do if you’re being investigated for VAT fraud?
If you think someone has reported you for VAT fraud or you are concerned someone suspects you are involved in tax evasion, there are a number of factors to be aware of. While reports of VAT fraud are typically made with good intentions, they are not always accurate and businesses can be falsely accused of tax evasion. The consequences of allegations can be dire, including business raids, arrests of business personnel, account freezes, and police questioning. This can, of course, be hugely detrimental to both a business’s reputation and success.
It is important to have a solid legal team in place during a fraud investigation as the outcome of the case relies heavily on the expertise and skill of the defence, due to the intricacies of UK and European tax law and the particularly specialist terminology.
If you or your business is being investigated for VAT fraud or tax evasion, it’s never too early to get in touch and form a strong defence. Our experienced fraud barristers are here to help – contact us today.