VAT Health Checks : Time to update

VAT Health Checks : Time to update

As the we enjoy the summer season and the scent of blooms fills the air, it’s the perfect time to refresh and review your VAT systems and compliance. Just as a gardener tends to their budding plants, ensuring your business’s VAT affairs are in order is crucial for a flourishing season ahead. Read our VAT expert Julie Green’s advice on why now is the perfect time for a VAT Health Check. 

Now is the perfect time to take action and safeguard your business with a thorough VAT health check. While standard audits and book-keeping provide a snapshot, they often miss the intricate details of VAT legislation that could leave your business vulnerable during an inspection. 

HMRC has stepped up its VAT compliance drive with the addition of over 3,000 staff since 2021/22 in its customer compliance units. The number of VAT investigations by HMRC saw a significant increase in 2023. The total number of enquiries reached approximately 105,000, marking a 23% rise from the previous year. This surge in compliance investigations resulted in the recovery of an additional £11.4 billion in unpaid VAT.

HMRC uses its own data system to scour databanks of information including social media posts. It is understood that the 'Connect' system now holds more than 55 billion items of data relating to tax payers. The system compares this data with the information taxpayers provide on their VAT returns. If it spots any discrepancies, a business could become the focus of a VAT investigation. For example, Connect can identify differences between turnover reported in annual accounts and VAT returns, incomes surpassing the VAT threshold in self-assessment returns and it is capable of cross-referencing property sales with Land Registry records. 

Remember, VAT compliance isn’t a seasonal affair; it’s a perennial commitment. Our VAT health checks are meticulously designed to identify and resolve potential VAT concerns before HMRC takes notice. With higher penalties for errors discovered by HMRC, ensuring your business’s VAT compliance is more crucial than ever.

Our experience shows that VAT health checks not only affirm your business’s adherence to VAT legislation but also pinpoint areas for improvement, enhancing VAT efficiency and easing the operational load. Don’t let your business wilt under HMRC’s gaze. Be proactive, and grant your business the gift of a VAT health check. Revel in the vibrant energy of the summer, confident that your business is shielded from any VAT inspections, and perhaps this year, we can present HMRC with less to celebrate.

For a detailed discussion on VAT, health checks, or the intricacies of HMRC’s CONNECT system, please reach out to our dedicated VAT team.

If you would like to discuss any of the above in more detail, please do get in touch for a chat with our VAT advisers. 

Or start a conversation with your local Haines Watts office using the contact us button below.