HMRC allowed 11,000 Chinese firms to register at one flat

The head of HM Revenue & Customs has admitted to the Commons Public Accounts Committee, that it allowed 11,000 Chinese firms to register for VAT at a single residential flat in Wales without checking who lived there. Jim Harra, permanent secretary at HMRC, revealed over 2,350 of the companies that were registered at the address owed money to the tax authority. Many are believed to be Chinese companies without a physical presence in the UK. Meg Hillier, chairwoman of the committee, described the case as “particularly worrying” and said it pointed to “systemic weaknesses in VAT registration and detection processes.” Richard Allen, a campaigner against VAT fraud, said: “For years HMRC claimed that there was not a problem with Chinese firms avoiding VAT on the products they sold online until they were forced by the evidence to accept that there was.” He added: “Now they are claiming that they can’t establish fraud when 11,000 companies all suddenly register at a single residential address which they have absolutely no connection with. HMRC needs to take this much more seriously.”

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The Times

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