VAT inspection link to BPSS dismissed

Fears that the taxman is targeting companies for VAT inspections after they have applied for help through the Business Payment Support Service have been dismissed by HM Revenue & Customs. Concerns had been raised by the UK 200 Group after a number of member firms said their clients had become subject to an inspection after rearranging their tax repayments through the BPSS. Kevin Dickens, UK 200 Group president, said: 'It has come to my attention, from very reliable sources that some businesses that have used this Business Payment Support Service have subsequently been notified of a "random" VAT inspection.' He added that some accountancy firms were becoming wary of advising clients to use the service 'unless it's absolutely necessary'. But a spokesman for HMRC said the inspections were 'purely coincidental', adding that there were a variety of reasons why a company could be targeted. HMRC recently said that some 60,000 businesses had reached agreements to delay tax payments totalling £1bn. Dickens said: 'What seems on the surface to be a government initiative to help businesses may actually be causing them additional anxiety, stress and costs in the resulting inspection visits.'

Philip Smith | Contributing editor, Business & Accountancy Daily

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