HM Revenue and Customs (HMRC) has hit back at criticism over its controversial Extended Verification strategy, claiming it has not taken a heavy handed approach to the CPU and mobile phone industry.
Hundreds of UK traders have been waiting for VAT repayments for over a year, as HMRC carries out its checks as part of its continuing crackdown on VAT missing trader (MTIC) fraud.
Tony Walker, director of MTIC compliance operations at HMRC, said in an exclusive statement to CRN: “Contrary to the view of some industry bodies, HMRC is neither targeting one particular sector, nor are we adopting a blanket approach.
“Verification is risk-based and targeted solely on suspect activity.
“The supply chains associated with MTIC fraud are sophisticated and highly complex – and this means that verification of a [VAT] claim can be a lengthy, but legitimate process.”
Walker went on to say that HMRC will repay a claim ‘immediately’ once it is satisfied that claim is valid, and that businesses can request interim payments of the VAT withheld.
He also said that traders should take every precaution.
“It is clear from our activity that normal commercial practice is being ignored and that the directors of many businesses have either deliberately, or recklessly, ignored factors that indicate transactions they enter into may have formed part of an overall scheme to defraud the public purse,” he said.
However, Fred Howarth, chairman of the Federation of Technological Industries, refuted this claim. “The majority of traders do take precautions and ensure the minimum standard complies with guidelines laid down by HMRC,” he said.
Russell Weeks, sales director at CPU trader Aston Technology Partners, said: “While we appreciate HMRC’s need to carry out its checks, nothing significant has changed for traders over the past 12 months.”
Clive Jeffersen, managing director of mobile phone trader Procom, said: “We don’t know anyone who has had their money back.”
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