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HMRC internal manual

Labour Provider Guidance

Interventions: compliance routes: VAT: Introduction and Risks

Once you have reviewed the VAT and other heads of duty information available to you, you will need to decide whether the risks identified should be pursued under an LM Intervention. Review LPOG1000 - Labour Market: Background, discuss with colleagues and draw on their knowledge and experience to determine if the case should be adopted.

VAT Labour Market Risks

The following are indicators of, or risks of VAT issues in typical LM cases. This is by no means intended to be exhaustive but may help you when deciding if an intervention is required.

  • Regular high input tax
  • Nil returns
  • Missing returns-particularly first period
  • History of phoenix trading
  • VAT to PAYE comparison not credible
  • CT accounts to VAT returns imbalance
  • Escalating tax debts
  • Low charge rate
  • CISR to VAT comparison imbalance

Tier 2 Sources

Tier 2 VAT interventions can come from the following sources;

  • Tier 1 work referrals from Sheffield
  • Risk lists such as the new registrations list, RIG lists or large debt lists
  • Standard Intelligence Packages (SIP’s) provided by RIS
  • Project/taskforce work
  • Cross tax case working within your team/directorate
  • Local compliance referrals
  • Evasion referral templates
  • Local knowledge/identification of labour provider companies.