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What assessment has been made of HMRCs' performance in repaying VAT to claimants where claims are properly claimed and payments are properly payable, the Chancellor was asked in Parliament recently. He was asked further about the percentage of cases in which the extended verification process for VAT repayments have been determined by HMRC to be connected with missing trader intra community fraud.
John Healey said that most VAT repayment claims are 'paid promptly'. However, in response to the increase in missing trader intra-community fraud activity in late 2005 and early 2006, HMRC are checking more suspect claims. They have deployed an additional 700 staff in 2006-07 to ensure that verification of these claims can be carried out as efficiently as possible.
He said further that over 95% of traders, whose returns are subject to the verification programme, have so far been found to be participating in MTIC fraud, or there is sufficient suspicion to warrant further investigation. Only 1% of the VAT withheld under this programme has been found to be properly payable. To date, the courts have found that HMRC's actions have been proportionate and reasonable.
Hansard, 12 June 2007, vol 461, no 103, col 944W
