Following a VAT fraud case which could lead to hundreds of millions of pounds in lost taxes, HMRC are targeting businesses in the textiles trade sector. With a budget deficit of VAT receipts estimated at £9.8bn (for the tax year 2020 to 2021), HMRC assess areas of risk and implement campaigns to raise VAT revenue aimed at plugging the hole in the Government’s finance by the economic damage caused by COVID-19.
We have had sight of HMRC correspondence which confirms that they are focusing their attention on textiles traders. They expect businesses to check VAT returns submitted with any input tax deducted adequately evidenced and relating to supplies received by the business. Due diligence should also be completed in respect of supply chains.
For further guidance / information please contact MHA Moore and Smalley 01772 821 021 / 01253 404 404.
