- HMRC is targeting poor compliance in labour supply chains, especially in construction, impacting VAT repayments and cashflow.
- Legitimate businesses can be affected if caught in tainted supply chains, facing withheld VAT repayments unless they prove supplier compliance.
- Updated HMRC guidance requires businesses to demonstrate due diligence and maintain robust records showing suppliers are compliant with tax and labour laws.
- HMRC may withhold VAT refunds if there is suspicion of non-compliance anywhere in the supply chain, unless the business can prove it took reasonable care.
- Businesses must regularly check and document supplier compliance, such as verifying VAT numbers and reviewing at contracting and regular intervals.
Source: menzies.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.
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