FTI Traders Meeting

Next Monday, November 13th the Federation of Technological Industries will be holding a meeting to discuss problems in the industry, and how HMRC have subjected the majority of repayment trader’s claims to extended verification a policy, according to the FTi, invented to "destroy the industry".

Monday November 13th 2006
TRADERS MEETING
Thistle Hotel, Heathrow UB7 0EQ
Register from 13:30  Meeting starts 14:00

Dear Trader

The FTI are holding a meeting on Monday November 13th 2006.

The meeting is at the Thistle Heathrow hotel and starts at 13:30.

Aimed at all traders in the mobile phone and CPU markets. We are inviting Importers,  UK to UK traders, Exporters and any combination of these.

We have had a very good response so far and to avoid disappointment recommend registering your intention to attend as soon as possible.
(www.fti.org.uk/register.asp)

Due to current problems in our industry, we have been approached by several newspapers and Panorama.  Our response to them is that we have nothing to hide so please feel free to attend if you wish. We expect the press and TV to be present.

EXTENDED VERIFICATION
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It is no secret that HMRC have subjected the majority of repayment trader’s claims to extended verification. This activity is not targeted at a particular group of traders but is being applied across the whole of our industry.

Nowhere in the VAT act does it mention EXTENDED VERIFICATION.  HMRC have invented this as a policy to destroy the industry.

No one disputes HMRC require a reasonable period of time to verify a traders transactions.  However once this verification is complete the trader has the right to deduct VAT  and should be repaid immediately.

The VAT act does not allow HMRC to verify complete chains and in some cases more than complete chains. The VAT act does not state traders should have their funds withheld whilst HMRC carry out Extended Verification.

Further verification is encouraged, the FTI support this, but there is adequate legislation in place to allow HMRC to take retrospective action if necessary.
The VAT act states all actions should be proportionate.

We know these fraudsters exist because HMRC keep telling us they exist, we can read about them in the news and watch the documentaries.

HMRC do not accurately tell us how much fraud is committed or how many fraudsters they have caught.

The current actions

On the balance of probabilities the fraudsters have probably moved on to other pastures as there is nothing to be gained by them waiting for HMRC to finish this exercise.  If there was any VAT lost they will have taken it  and are therefore unaffected by this Extended Verification exercise.

On the other hand the honest traders appear to be sitting back waiting for HMRC to finally make the repayments due to them.

Taking action does not need to be an expensive exercise.  There are actions traders can take themselves with a little help / advice.

The FTI are here to help and we plan on detailing this help at the meeting on Monday 13th November.

REVERSE CHARGE
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It is assumed this legislation will be introduced in December 2006.

One would assume HMRC have carried out extensive consultations with representatives for our industry. This assumption is incorrect.

One would assume HMRC have issued fact sheets and bulletins detailing the operation of Reverse Charge and what trader / retailer requirements are.  This assumption is incorrect.

The FTI hope to have more details on Reverse Charge for the meeting on Monday 13th November but we do not think it is likely to be introduced before Christmas!

DE-REGISTRATION
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Traders are reporting that HMRC have deregistered them because they are not trading and cannot show an intention to trade.  It is irrelevant to HMRC that a trader is not trading because their capital is tied up whilst they carry out their Extended Verification and therefore they cannot trade.

It is irrelevant to HMRC that even if a trader had funds to trade there is no legal certainty that they will be granted their right to deduct input tax. If traders had legal certainty they would trade.

There are steps that can be taken to avoid deregistration and these will be discussed at the meeting on Monday 13th November.

THE MEETING
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Monday 13th November 2006 14:00 at Thistle Heathrow hotel
(Registration starts 13:30)

An open meeting to discuss matters of concern within our industry
Guest speakers from leading law firms and tax advisors

Your chance to be heard

AND IT IS FREE

visit http://www.fti.org.uk/register.asp for further details.

By doing nothing you are letting your families down, letting your employees down but most of all letting yourself down.

You have worked hard to ensure you trade honestly and avoid involvement with fraudulent activity. Now is the time to work hard and put HMRC straight.

I look forward to seeing you at the meeting on Monday 13th November.

Fred Howarth
Director
FTI Ltd