HMRC has launched a new online system to tackle criminals who evade VAT on road vehicles they bring into the UK.
Why does HMRC need a new online system?
The new system will allow the DVLA to check HMRC’s online records which will show whether the correct VAT has been paid on vehicles brought into the UK. VAT must be paid by law before a vehicle is registered for use on UK roads. Despite this, legality failure to pay the correct vehicle VAT in these circumstances is common. It is estimated that VAT fraud from vehicles being brought into the UK costs the Exchequer around £110 million a year.
HMRC’s new system aims to tackle this fraud and also simplify the rules for legitimate users, making it easier to notify HMRC and register vehicles brought into the UK from abroad.
The new system is named the online Notification of Vehicle Arrivals (NOVA) system. It replaces the old process which was a manual system and saw people deal with HMRC and the DVLA separately.
How will the new system prevent VAT fraud on vehicles?
Talking about the new online system, Sally Beggs, Deputy Director for VAT fraud at HMRC, explains: “Criminal gangs abused the old system in the past by bringing vehicles into the UK and registering them with the DVLA without accounting for VAT. That stops today. The new online collaborative system means people will get the green light from the DVLA only where their vehicle has been notified to HMRC for VAT purposes. Any attempt to cheat the system will stall.”