Car VAT crime crackdown

Consultation on a new online system to stop criminals evading VAT on road vehicles they bring into the UK has been launched by HM Revenue & Customs (HMRC).

The document - "Tackling VAT evasion on road vehicles brought into the UK" - asks questions on the development of a new online system to begin in 2013 that will ensure that the correct VAT is paid.

David Gauke, Exchequer Secretary to the Treasury, said: "If no action is taken, significant revenue could be lost in future years. This is due to organised criminals exploiting the current manual-based system. This new online process will stop them in their tracks and put an end to opportunities for this fraudulent activity. This will deliver an additional £125m in the first full year."

Richard Bysouth, HMRC, said: "From 2013 the new online system will mean no one will be able to get their vehicles registered with the DVLA unless they have notified the vehicle online and the VAT has been paid or HMRC is confident that the VAT will be paid.

"We are seeking views from people who bring road vehicles into the UK either in a business capacity or as private individuals."

Budget 2011 announced a joint HMRC/DVLA initiative to replace existing manual procedures with a mandatory online notification requirement for road vehicles entering the UK for permanent use on UK roads. This will enable real-time verification of the VAT status of notified vehicles, with collection of the VAT up-front in some cases. Consequently, the DVLA will be provided with timely information, enabling it to refuse vehicle registration if the VAT is not assessed as secure by HMRC, thereby protecting the tax.

This is a joint HMRC/DVLA initiative aimed at countering high levels of VAT fraud in this area and to simplifying the system for all users.