HMRC Power For Offshore Citizen

[jonnyvelvet]

I am a channel island resident which is not part of the UK and have been domiciled in Thailand for the last 7 years. I haven't live in the UK for over 8-9 years, never had a UK bank account, never been on any registers as I survived by club promoting for cash for 5 years so no on any radar in the UK.

I now have a succesful online business and company registered in Hong Kong and applied for a UK VAT number which I use for my suppliers to get VAT zero rated supplies. I have no intention of paying any VAT over unless someone can prove me wrong below.

My question is firstly.

If I just keep paying the VAT assessment they give me (essentially fiddle the figures) and not submit returns, what actual powers do HMRC have? Im not even a UK passport holder, I just have UK customers. They are hardly going to send someone to Thailand to chase a foreigner who has a non UK passport and a Hong Kong Company? I suppose they could chase the company, but I could just fold the company if it ever got that point and put two fingers up and start again.

Secondly, I havent lived in the Channel Island since I was at school around 23 years ago other than a year period I went home to stay with my parents unemployed before I moved to Asia never been on the register in my passport country either. So, they can hardly claim anything of me as I can clearly prove I dont live there.

I am going to apply for personal tax residency in Thailand as I have no desire whatsoever to return to the UK or my home country. So at least I will have something more formal to show if ever required (which I have no intention of co-operating) my assets over here are not not my name and I have around 160,000gbp saving in an e account, but transferring that over to an FX account in Thailand soon.

The main point is , what actual powers do they have to do anything? Can I just tell them to p$$ off? I have never heard of a case where HMRC have had the power to chase an individual with a passport of another country over an "alleged" unpaid tax bill? If someone has any tangible evidence this has happened before, I would love to see.

I know you cant fack with the IRS, but HMRC doesnt appear to actually have any powers and I hate being told what to do.

 

[Tax Cow]

What powers do they have?

1. Offer you a time window to settle your unpaid taxes -> You do not pay
2. Invite you to a court in the UK -> You ignore the invitation
3. Issue an arrest warrant through Thailand embassy -> Thai policeman will take a break from Tbagging a ladyboy and get you arrested
4. You are booked on a flight to Heathrow where where you will be forced to piss in a container and get drug-tested (random airport fun in retaliation to your "P$$ off")
... Steps 5,6, and 7 do not need further clarification.

If you want to play this game, try to keep your unpaid taxes below 6 digits.

PS! VAT registration threshold in the UK is pretty generous, maybe you do not need to worry.

 

[jonnyvelvet]

ok give me one example ever where they have done this before. Again, tangible evidence not myth and scrae stories just like the TV license

 

[Tax Cow]

Those are just highlights of 2018 (link below). Most cases involved domestic taxpayers, but a few highlights involved a non-resident, or someone who relocated outside the UK in an attempt to avoid detection or prosecution. Approx a quarter of successfully prosecuted UK tax crime cases involve non-resident individuals or companies (brief online search for historical data).

£9.8m VAT fraud one of HMRC’s top criminal cases in 2018 | Accountancy Daily

Quote from article:

HMRC’s fraud investigations have led to 671 people being convicted over the last 12 months for their part in tax crimes.

1. I must recall my previous friendly advice "If you want to play this game, try to keep your unpaid taxes below 6 digits."
.. As you can read in the highlights article, they (criminally) prosecuted 5-digit tax evasions as well. Not to be captain obvious here, but you should keep your unpaid taxes below 5 digits to be "on the safe side".

2. Why register for VAT if you do not intent to comply? You put yourself on radar for no good reason - you should instead try to give an impression that you do not exceed the 85K registration threshold to retain the pricing advantage. Get business inputs deducted through a non-UK subsidiary. As a non-resident with no physical presence in the UK, that would help keep the investigators at bay for a little while longer. Lastly, your case seems a little odd. Are you a businessman or "a businessman" - I'm not sure here. If you intend to claim VAT refunds with fake invoices, your registration for UK VAT number is indeed a prerequisite. If that's what you had in mind, you're absolutely insane to attempt it in your own name without sophisticated identity concealment strategies.

 

[jonnyvelvet]

Again that arcticle is irrelevant. They are UK residents and UK passport holders. Still waiting on any evidence that HMRC have the power to issue a criminal arrest warrant for a foreign passport holder living in a foreign country?

With the amount of chinese Amazon sellers not declaring the full VAT, I would have thought the british jails would be full of extradited chinese people being sentenced in a UK court! It has never happened.

I dont intent to make any VAT claims at all. I just am questioning the power of HMRC to audit offshore companies and make criminal cases against individuals who do not hold a UK passport and live abroad if hypothetically the VAT returns were not fully legit.


Also far the evidence is zero.

I needed to register for VAT as I required a VAT number to provide to my suppliers as per the reverse charge mechanism due to selling in the EU.

Secondly, you are incorrect about VAT for offshore comapnies in the UK.

There is NO threshold, you are supposed to pay VAT from the very first penny of sales made in the UK. So, if you dont understand the basics, I am reluctant to take your advice on anything else.

 

[Tax Cow]

You could not understand the basic suggestion to register a UK company to deal with UK sales, and use a non-UK company to deduct business expenses? A simple non-UK VAT number from within the EU for your HK LTD, and a UK LTD for sales in the UK would keep you in much better shape.

Your dumbass plan is hilarious. Please update how it works, I'm sure there's no way to convince you to amend your approach in any direction. And of course, diplomacy does not exist. The UK is just an impotent, and the Thai authorities will blatantly ignore all request for legal assistance when they want to come after you.

 

[jonnyvelvet]

Amazing how you still haven’t been able to provide any evidence to the original question! Instead going of on a rant . Very simple question I have asked . Provide evidence pal

 

[Nyep]

highlights of 2018

This one is pretty nuts:

Goodman failed to declare income of more than £219,000 to HMRC [...] evading £57,000 in income tax. [...] Goodman was sentenced in her absence to 28 months in prison.

28 months for £57K! That's a month in prison for every ~£2K evaded.

 

[jonnyvelvet]

This is like pulling teeth! She is a UK citizen? Don’t you understand the difference? I really have tried to be as clear and simple as possible but you really do seem to fail to either read English or are willfully being ignorant.

One last time

Find me one example of a foreign national who has been extradited on a criminal arrest warrant and put into a uk court for filing incorrect vat returns

If you can’t provide any evidence specifically under this scenario then please stop wasting everyone’s time

 

[jonnyvelvet]

Also the article is talking about benefit fraud that is completely different

 

[Nyep]

This is like pulling teeth!

Don't get your panties in a twist, Betty. It was a general comment, unrelated to your quest of finding a non-UK citizens pwned by HMRC. Not everything has to be about you, even if you are OP.

 

[jonnyvelvet]

Thanks but I really don’t need general comments , I would just like to find anyone who can actually provide evidence to answer my question but that is obviously proving impossible

 

[Mad Dog]

yes they can attack the business you regsitered for VAT in case of under reporting compliance. Then for what its worth, it depends how much is being underdeclared and costs of recouping this. Your account can be singled out randomly for spot checks.

Its quite easy for HMRC to open proceedings UK against HK and get a judgement that way, enforcable against HK corp, which then either has to be liquidated or not depending if you decide to fight. So it all becomes messy. And yes if the HK corp is missing 500k of VAT charges, they can and will make you personally responsible under the prevailing laws of HK OR UK.

I would set up a second business and a third from time to time a limit exposure over a time period, shoudl you really go down this way.

OR alternative stop UK registration and register a UK corp, which buys in the supplies and resells them to your HK corp(vat 0% as abroad) but with a reasonable markup to avoid "profit shifting"

this way you would have a uk corp with low profits and a vat registration BUT then go to Cyprus or something as they are much more easy going down there........ and only 12.5% corp tax.

 

[jonnyvelvet]

That is all very well and good in theory but still doesn't answer the original point other than they can prosecute the company and then the director. But, name one occasion in the history of the planet where this has happened? In fact, there has never been single prosecution of an overseas seller being done for VAT evasion!

This article is quite clear

Investigation into overseas sellers failing to charge VAT on online sales - National Audit Office (NAO) report

The NAO has investigated concerns that online sellers outside the EU are avoiding charging VAT on their goods located in the UK when sold to UK customers.

www.nao.org.uk

To date, there have been no prosecutions for online VAT fraud but HMRC has carried out many civil operations against suspected evaders. These civil operations include 279 investigations of businesses and 373 compliance interventions in 2016-17. HMRC considers criminal prosecutions are not the appropriate response to this type of fraud. There are particular difficulties in prosecuting suspected online VAT fraud which make this route lengthy, costly and with an uncertain outcome. In 2016 HMRC gained new legal powers to tackle online VAT fraud and error, which have the benefit of applying to all non-compliant behaviours, with no requirement to prove intent.


Therefore, if you simply fail to comply then they will do jack s**t other than send nasty letters. They have no power to audit offshore accoutns and a private hong kong company accounts are not public-ally listed either.