HMRC has seen a 51% rise in additional VAT take over the last twelve months following a major campaign to crackdown on VAT abuse, according to research by tax investigation insurance specialists P2P.
The firm calculates that the amount of additional VAT raised as a result of investigations has risen from £3.5bn to £5.3bn in the last year, which it says is largely the result of HMRC putting increased pressure on small businesses.
P2P estimates that over the last three years, local HMRC investigations brought in an extra £8.4bn in VAT, compared to the £3.9bn from investigations into big business. HMRC’s local teams have increased the VAT take from their investigations by 70% in the last year – from £2.3bn to£3.9bn.
Kevin Igor, P2P managing director, said: ‘HMRC is using sophisticated technology as well as local knowledge to go after small businesses that it thinks are not complying with the VAT rules. The combination is clearly working and will continue for some time.’
