The director of a consumer electronics e-tailer is fighting for her business’ survival after being caught up in HM Revenue and Customs (HMRC’s) crackdown on VAT carousel fraud.
As CRN’s campaign to highlight the plight of innocent traders hit by HMRC’s Extended Verification process reaches its eighth week, e-tailer Wi5.com, which sells MP3 players and other electronic goods, was waiting for a £44,000 VAT repayment.
Renee Kalia, director of Wi5.com, said her firm, which has been trading since 2004, does not fit the usual mould for Extended Verification because it deals solely in the UK and does not export abroad.
“We have been waiting for our repayment since January and have already confirmed that no wholesales and no exports were carried out,” Kalia said.
“We had simply ordered more stock to cope with the Christmas rush. I know that the mobile phone and CPU traders have been suffering from Extended Verification, but we are a completely different business to them and this problem seems to be spreading to other industries.”
As a result of the delayed repayments, Kalia said she has been forced to cut back on costs and let several members of staff go. She has also enlisted the help of her local Conservative MP, Adam Afriyie, who has written to HMRC on her behalf.
“There should be some recourse for HMRC failing to strike a balance between legitimate verification requirements versus innocent businesses,” she said.
“It is evident that businesses need protection from HMRC and the sooner their draconian measures become public knowledge, the better.”
An HMRC representative told CRN the government body could not comment on individual cases due to ‘legal reasons’.
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