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Companies wanting to register for VAT are having to wait as long as two months
as a result of the government's attempt to clamp down on carousel fraud,
according to a study by accountants UHY Hacker Young.
Normally, the process takes two weeks on average.
Companies with a turnover above the threshold without a VAT number face severe
curbs on trading following a 500% jump in carousel fraud, the firm said.
The long waiting period is now thought to be putting bona fide business deals in
jeopardy.
Simon Newark, VAT partner at UHY Hacker Young, explained: "Not having a VAT
number can stop a business from trading. Business partners often refuse to deal
with unregistered businesses and many property deals in particular cannot be
completed without a valid VAT number.
"Legitimate businesses feel they have to go to absurd lengths to establish the
credentials of customers and suppliers because in many cases losing 17.5% VAT
will wipe out their profit margin. It can be enough to put the business in
serious financial difficulty."
HMRC recently doubled the number of investigators tracking VAT fraud to 1,000.
This month it launched its biggest raids with 400 officers and 100 police
swooping on suspected fraudsters across Britain.
An HMRC spokesman commented: "We accept this approach is causing some delays
but we believe they are a necessary part of our fight against fraud."
Source:
RedAlert
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