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Post Info TOPIC: Is this tax evasion or tax avoidance? (VAT)
dandiego25


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Is this tax evasion or tax avoidance? (VAT)
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Hi all,

I have just started with a new client who has 1 VAT registered business and 1 that isn't. It seems that when an invoice has a high VAT value they will often ask a supplier to re-issue the invoice to the VAT registered company, even where it has nothing to do with that company. They then pay from the non-registered company and record the transaction as a loan to the registered company.

Obviously this is poor practise for a myriad of reasons - clearly it skews the P&L and in the case of the non-registered company may lead to overstating profits and paying more corp tax.

I don't do the books for the VAT registered company so I don't know how this hits their accounts.

 

My key question is... is this legal? I get that in theory it seems like a clever work-around but to me is seems a bit tax evasion-ey and I want to put draw my clients attention to this asap if required.

 

Thanks all!



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Daniel

 

Be kind, be bold and be grateful!
Cheshire


Master Book-keeper

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Evasion. Suspicion of is enough. Report it. Careful about 'tipping off'. Of course you can tell him to stop being a plonker!

__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
pictures


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Cheshire wrote:

 Of course you can tell him to stop being a plonker!

 Best answer ever!



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Julie
Cheshire


Master Book-keeper

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pictures wrote:
Cheshire wrote:

 Of course you can tell him to stop being a plonker!

 Best answer ever!

 biggrinbiggrinbiggrinbiggrinbiggrinIve been telling a few people that this week!!!!biggrinbiggrinbiggrinbiggrinbiggrin

 

Oops forgot to add for Daniel -  disengage

 

 



__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Amanda


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Disengage immediately as Joanne said.

I have one like this years ago and as soon as I found out I ditched him and ran! It can lead to all sorts of problems/investigations etc and clearly shouldn't be operating like that. Then report him to HMRC.

__________________

Amanda
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