- Businesses fear receiving a Kittel VAT notice from HMRC
- HMRC can demand repayment of previously reclaimed tax, which can be substantial
- Notices are issued when a trader knew or should have known their transaction was linked to VAT fraud
- This makes the trader ineligible for input tax deduction
- Kittel VAT is a significant concern for traders, but risks can be reduced
- HMRC issues a notice if VAT was evaded, the transaction was connected to the fraud, and the trader knew or should have known
- Missing any of these elements means no notice is issued
- Due diligence is key to avoiding Kittel VAT notices
- Conduct necessary checks as part of anti-money laundering processes
- Ensure robust supply-chain due diligence and understand all business transactions
- Raise concerns immediately if in doubt to avoid severe fraud implications
- Insufficient due diligence may result in being treated as an accomplice to fraud
Source: bainesjewitt.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
