This Client was referred to us by one of our associate partners running a law firm. The client’s premises were raided by the VAT fraud team. They took into possession all books, records, invoices and contacts that were present at the factory. From this the HMRC found that the client had been declaring partial income streams and not all of its activities.
The client had gone to 3-4 various accountants in order to find the accurate representation for the situation they were stuck in. Given the nature of what the HMRC had come across their attitude towards the client was extremely aggressive and dismissive. They had thrown the book at the client and assessed a VAT payable for £800,000 plus , going back 6 years.
When we eventually took the case and began to represent, we first had to diffuse the inspector’s stance by convincing them that we were there to find an amicable solution and effective outcome of the case, rather than to protect any wrongs that had taken place. Once they were convinced that we were a part of the solution and not the problem, we ended up negotiating the case at £120,000.
The key factor in resolving this case was to show the HMRC that all penalties being imposed must be justified. One wrong doesn’t mean that everything the client is doing or has done is entirely wrong. We also showed the HMRC that we would help in streamlining the clients business activities towards transparency