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Taxman may fine you if your suppliers are cheating them!
Companies could be prosecuted and face unlimited fines if they fail to spot tax evasion by their suppliers.
This is part of a crackdown by HMRC on Vat and contractor tax frauds.
Although the rules being applied by HMRC came into force two years ago advisors generally are reporting more incidences of HMRC bringing investigations.
With a particular focus on VAT fraud and the status and fraud within labour suppliers and contractors, HMRC are issuing letters to some businesses where they believe there are issues in the supply chain as a warning of the need for enhanced due diligence.
HMRC then seek to arrange an inspection of customer and supplier contracts and transactional histories.
Possible sanctions include criminal prosecution of a business, unlimited fines and where appropriate loss of government contracts.
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