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News - 19 April 2013

HMRC to target VAT car crime

HMRC has launched a new system on VAT on vehicles brought permanently into the UK.

The new system, Notification of Vehicle Arrivals (NOVA), can be checked by the DVLA and is primarily put in place to simplify the process and counter fraudsters evading VAT on vehicles brought in from overseas.

According to the Revenue, this type of fraud costs the Exchequer around £110m a year.

An HMRC spokesperson said that the fraud mainly stems from cars brought to the UK from EU countries. "HMRC have the power to inspect documents, including car ownership documents, as part of their compliance powers," they said.

"However, the NOVA system tackles the VAT risk by ensuring that the VAT due is secured by HMRC before the vehicle can be registered and licensed with the DVLA/DVA."

NOVA replaces the manual system, whereby people dealt with HMRC and the DVLA separately.

Under the new system, people who bring vehicles permanently into the UK must notify the Revenue within two weeks and pay or account for any VAT due. Failure to do so will result in a £5 late notification fee per day. Until HMRC has been notified, they will not be able to register their vehicle.

Tonmoy Kumar, Manager of the Accounts Department of ABDS comments:
“Accountants acting on behalf of a VAT registered business will need to be formally authorised by their clients to notify HMRC, however for a private individual or non VAT registered business they will not. A code will be issued which must be activated  within 30 days from the date of the letter.

For a more personal approach, those considering setting up a business contact us at ABDS to offer help and support on a range of issues, including keeping records, VAT registration, National Insurance, starting up a limited company, and PAYE Real Time Information.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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