Serious Fraud Office £500,000 fine for VAT | Bradleys Accountants

/ Posted By - Bradleys Accountants / Categories - Accounting news

In an ironic turn of events, UK’s top anti-fraud agency – Serious Fraud Office (SFO), has been fined more than £500,000 for underpaying its VAT bill by more than £3m.

The fraud watchdog used to reclaim VAT on fees paid to barristers and other contractors. The serious discrepancy came to light after the SFOs new chief financial officer, Barny Todd, self-reported the wrong to HMRC after the annual accounts were laid before parliament.

Subsequently, the agency has to pay a fine of £564,000 and make an underlying tax repayment of £3.8m plus interest – this is close to 10% of the organisation’s entire £51m spend for the year to 31 March.

    Subscribe to our newsletter

    The fine comes at an inopportune time as the agency had, in February 2013, successfully negotiated a £19m increase in its budget for the year from the Treasury. The discovery has come close on the heels of an earlier investigation into nearly £1m of secret payments to departing staff approved by Richard Alderman, a director whose tenure ended in April 2012. In its annual report for 2013-14 the SFO said, “These discussions, coupled with an HMRC assessment which took place in October 2013, led to the SFO having a liability for reclaimed VAT in previous years… amounting to a total of £4,635k [£4.6m] including a penalty of £564k, interest of £104k, accrued tax of £798k and outstanding tax of £3,169k.” The report also mentioned that the SFO’s operating cost had crept up from £38.1m in the 2012-2013 financial year to £51.7m this financial year not only due to the VAT error but also to support costs associated with investigating big cases such as the alleged manipulated of the LIBOR rate, corruption by Rolls-Royce and Barclays’ dealing with Qatar during the bank’s 2008 emergency cash call.

    Labour’s shadow attorney-general, Emily Thornberry felt the VAT error was “extremely embarrassing” and also commented, “the SFO is struggling to make its threadbare resources stretch to cover both its ambitious caseload and the legacy issues left by its previous leadership.”

    Related Articles

    The UK Spring Budget 2024 – What…
    | Accounting news

    There was a good deal of anticipation around the UK Spring Budget 2024, especially as … Read more

    How Autumn Statement 2023 influences businesses and…
    | Accounting news

    In the recently announced Autumn Statement 2023, several major changes were introduced with the aim … Read more

    UK Spring Budget 2023: Top things to…
    | Accounting news

    On 15 March 2023, Chancellor Jeremy Hunt started his Spring Budget speech by informing Members … Read more


    Subscribe to the newsletter

    Know about latest accountancy updates, company news and business growth tips. Every month, in your inbox

      Subscribe to our newsletter