More Compliance Checks For Car Dealers
- November 5, 2019
- Posted by: John Swift
- Category: Automotive Industry
Used car dealers face more compliance checks and red tape from next month and amid warnings that the HMRC could be looking at their tax records and the FCA introduces a new certification regime.
Accountancy firm EHY says that the Inland Revenue is focusing on the car trade and VAT and PAYE compliance among retailers. It warns that tax inspectors finding a discrepancy in one area, perhaps VAT, might mount a more thorough audit – and businesses could be landed with a six-figure bill.
A spokesman said:
“With VAT in particular, we have seen an increase in the number of compliance checks taking place within our client and contact base. It is often the case that issues identified from a VAT perspective result in an employment tax check in the following months, further increasing the risks. The total size of the potential assessments can be very significant, often six-figure sums, causing major distress for owners and management.”
New FCA regime from December 9
Dealers are also being reminded that from December 9, businesses registered with the Financial Conduct Authority as a credit broker must comply with its new Senior Managers Certification Regime.
Most independent, used car dealers will fall into what the FCA calls the Limited Scope category and if they are already a Limited Permissions Consumer Credit Firm the business can transfer to become an LSC firm.
The idea of the SMCR is to make named individuals in the business more accountable and generally raise the standards of issuing credit. The move comes just weeks after the FCA announced a crackdown on dealers’ commission on finance sales.
It has been welcomed by one company specialising in dealer training and profitability, ASE Global. Mike Jones, Chairman, said:
“The new regime offers an ideal opportunity for motor dealerships to review their FCA practices and to provide an incentive to address needs within their business” before adding “the new regime requires businesses to require individuals to take a positive responsibility for their actions.”
The FCA has an online tool for checking your firm’s category which can be found by following this link: www.fca.org.uk/decision-tree/firm-checker-tool