Interventions: compliance routes: VAT: Deciding further action
Dependant on whom you have seen/interviewed, what records you have reviewed, whether you’ve met with any company representative at all and whether documents have been produced will obviously lead your decisions, risks and next actions. Below are some possible next steps;
If you have been able to resolve the risks identified
- Consider other taxes/tax interventions - if the main VAT risks are in hand, other taxes can continue working alongside your review,
- Debt Pursuit - if the only risk remaining is debt liability, arrange the time to pay plan and monitor the payments until the debt is cleared. See LPOG3500.
- Monitoring - if you have resolved the initial risks raised but have confirmed that the customer does conduct Labour Market activities then you may wish to diarize their details and review them at the next significant point in time for example, end of financial year, seasonal increases/decreases, changes from monthly returns to quarterly returns
- Any case identified as a ‘labour provider’ should have a 251 indicator registered on VISION - see LPOG6490.
- You may wish to set a local office inhibit to ensure any future repayment claims are verified, complete a VAT135 and leave your user interest on the EF folder if you want the repayment claims to be referred to you.
- The information gathered may now lead you to a new case, so you will start the Operational Assurance process again.
If you have been unable to resolve the risks identified
- Schedule 36 - issue notices for the production of documents and information, follow up with penalties if the customer fails to comply,
- If there has been historical non-compliance and the customer continues to be non-compliant despite our intervention, you can raise a referral to Securities who can review the raising of a security notification alongside our continued actions, see LPOG8250 for further guidance
- De-register - if you have attended the premises and no one was available, there was no evidence of trade, you left a letter and no one has contacted you in the interim, tax is at risk and so on you can consider de-registering the VAT number (see LPOG4550 and VATDEREG manual). If you do take de-registration action, then de-reg veto letters (see LPOG7300) should be issued to any known customers (see LPOG4551).
- If there are VAT debts on file or there has been non-compliant behaviour and we are aware of potential under-declarations of tax you should issue tax loss letters to any known customers (see LPOG7300).
- Local references - if you have obtained partial information in relation to sales/purchases of labour your customer has made, you can raise requests to other local LM teams to contact suppliers/customers and obtain any further information about any business transaction conducted with your customer.
- Raise assessments for under-declared/over-declared VAT. Dependant on the error found/assessment basis you may need to issue tax loss letters to customers (see LPOG7300).
- You will need to review and complete PDACs for any penalties the customer may be liable to, see LPOG7210 for further guidance.
- If you have concerns regarding any technical issues, possible abuse of VAT rules and regulations, have an assessment to raise over £100,000 you will need to submit a review form to the FIS Professionalism team, see LPOG7210 and LPOG8150 for further guidance.
- If you have established tax losses of £50,000 or above, or evidence of fraud, you will need to complete an Evasion Referral Template (ERT), see LPOG6800 for further guidance
- If there are debts on file for the customer and you have encountered continued non-compliance, failure to produce, failure to keep to a time-to-pay plan, failure to submit returns and so on, we can begin winding up proceedings for debts over £25,000. You can also consider winding up action if you are dealing with a repetitive phoenix company which has a debt less than £25,000, as the petition can be supported due to the potential tax at risk which can be proven by cross referencing to the historical companies. See LPOG3500.