Sole traders and VAT

Discussion in 'Legal' started by Falkirk300zx, Nov 15, 2017.

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  1. Falkirk300zx

    Falkirk300zx UKBF Contributor Free Member

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    Hello all,

    We have been doing an audit on a client's contractor and the check has thrown up an anomaly.

    The contractor is a sole trader called 'XYZ' owned by Mr Smith and has a VAT number but when the VAT number is checked it is registered to another person, Mr. Jones. They both live in the same city but different addresses and there seems to be no documented connection.

    My belief is that the sole trader is the registered VAT entity meaning that I would expect it to be registered to Mr. Smith (described as the 'managing director') not the unknown Mr. Jones.

    The VAT invoice is XYZ at Mr. Smith's address, no mention of Mr. Jones.

    It all seems very fishy to me but can there be a legit explanation?
     
    Posted: Nov 15, 2017 By: Falkirk300zx Member since: Mar 20, 2009
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  2. kulture

    kulture UKBF Legend Staff Member

    7,913 2,154
    Why did you check? Why not ask them? Then why not report this to HMRC? There could be a perfectly simple explanation OR Mr Smith could be charging VAT and not passing it on to HMRC.
     
    Posted: Nov 15, 2017 By: kulture Member since: Aug 11, 2007
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  3. Falkirk300zx

    Falkirk300zx UKBF Contributor Free Member

    55 2
    It's a long story but quality issues led to looking at the company and their set up, Mr. Smith has given the impression of being one thing but turns out that he isn't and is something else etc etc. The issue that raised the concern was what appears to be a fake accreditation.

    The client had employed employed a company to do diligence on Mr. Smith but it would appear that they have either missed the warning signs or everything is bona fida and just looks dodgy.

    The relationship has broken down between the client and Mr. Smith. Mr Smith won't discuss anything to anyone and has claimed that XYZ has been shut down and formed a new company ABC.

    It is my intention to report this to HMRC but prior to doing that, I just wanted to see of anyone had come across this type of thing and to see if is there a perfectly reasonable explanation or is it something more sinister.
     
    Posted: Nov 15, 2017 By: Falkirk300zx Member since: Mar 20, 2009
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