The automotive sector underpaid £444.2m in tax in 2021-22, HMRC figures showed. This is a significant amount of money, and it is clear that HMRC is determined to recover it, potentially putting many dealerships at risk and creating undue stress and worry, warns accountancy firm Armstrong Watson.

‘As a motor dealer, it’s important to be aware of the risks and take steps to mitigate them. The automotive sector is receiving a mass of unwanted attention with the number of investigation notifications being served but it is important to co-operate as the penalties for non-compliance can be severe,’ said Nick Lanigan, tax assistant manager at Armstrong Watson.

‘The pandemic saw HMRC’s forces redeployed to investigate fraud and errors on furlough payments and other Covid support schemes. During this time, there was a noticeable absence of investigations raised on VAT, PAYE and corporation tax matters.