By Marcus Leach
North West accountancy firm Mitchell Charlesworth is warning that non-VAT registered businesses could face a HMRC investigation following the end of an amnesty period for registration on December 31.
Mitchell Charlesworth VAT manager Colin Corder urged firms to take immediate advice if they are unclear on their VAT position. He said all firms with a taxable turnover over £73,000 must register for VAT.
“HMRC is set to investigate 40,000 non-VAT registered businesses which it believes should now be VAT registered, or should have been in the past,” he said.
“Firms that have not registered but are found liable for VAT could face penalties of up to 100pc of the tax owed on top of the existing sum owed and possible criminal prosecution.”
Mr Corder said firms are particularly at risk if they are not taking regular accountancy advice.
“I often see businesses that do not know how and when to check if they have exceeded the VAT threshold,” he said.
“As a result many businesses exceed the VAT threshold but are unaware they have. So the key message is to check and double check your VAT position with your accountant through-out the year.
"Those firms that only take accountancy advice once a year, when they file their annual returns, are especially vulnerable to this crackdown. It is vital to have a proactive accountant who you deal with on a weekly or monthly basis. That way you can plan your finances carefully and ensure all your tax and financial planning affairs are being rigorously managed.”
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