According to FE Week HMRC has launched a major investigation into subcontracting that could result in tens of millions in fees and fines after it discovered many colleges and training providers are ignoring VAT rules on management fees.
FE Week understands that the tax office has put together a team of around 20 special investigators, who will find out why primes have not been applying the 20-per-cent charge to their top-slices, per the rules.
HMRC plans to investigate up to six years of unpaid VAT and will attempt to claim it back.
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