Today as the world economy is progressing, each country is striving to be economically developed in order to create the best living conditions for its citizens. A country’s economic prosperity can be estimated with the amount of money in the government exchequer that reaches the government through various forms of taxes. Tax is a compulsory payment that every citizen of a country needs to deposit with the government officials and has many forms such as VAT, sales tax, Income tax and Excise duty etc. However when a citizen knowingly abstains from paying this compulsory payment, it amounts to the act of tax evasion.
Hussain Solicitors report a number of frauds relating to tax benefit & tax evasions take place on daily basis and one such form of fraud is the VAT fraud. VAT refers to value added tax and is an indirect form of tax where manufacturers or dealers charge certain percentage of the price of the product sold to their customers as tax. According to legal system of almost every economy in the world, the dealer who has to compulsorily charge VAT from its customers, must collect the same and deposit it to the relevant government authorities. However, when a dealer doesn’t charge VAT when he should have or when he doesn’t deposit the collected amount to the officials, it amounts to VAT fraud.
A person indulging in VAT fraud might do the following things to deceive innocent consumers or government officials:
- Ask the consumer to pay amount of sale to someone else instead of him in order to avoid charging and payment of tax
- Uses a false or non-existent VAT number on the bill Performa’s issued to the customers
- Haven’t registered themselves for VAT, even if their area of operations relates to VAT.
- Asking for a complete in-hand cash payment is considered to be one of the most common cases of committing VAT fraud.
- Claiming to have applied for a VAT number and charging customers VAT amount, in fact when they haven’t applied for anything and keeping the entire amount charged as VAT with themselves.
There is no doubt that the cases of VAT frauds are certainly on a rise around the world but most of countries have established strict rules and regulations to deal with the same. In fact the government of UK has set up an exclusive website dealing with the reporting of such cases. Here, a person or any known party of VAT fraud case can report directly to the officials of HM Revenues and Customs through a hotline number or even by using online portal. The reporting of any kind of VAT or money fraud case to the government is the duty of every responsible citizen of the country as it is your own money that is being looted by the people involved in tax evasion and fraud.
The government of UK even advises its responsible citizens to not get into the details of the VAT fraud as this could prove harmful for their lives. No matter how little or much you know about the VAT and Money fraud, report it to the officials so that they can immediately take strict actions against the culprits.