Propertymark declines to reveal how much its ‘misdefinition’ VAT cheque cost

Propertymark has declined to comment on how much it paid HMRC last year after it was discovered that it significantly under-paid VAT through a ‘mis-definition’ of its liabilities and exemptions over several years.

The error was highlighted within its annual accounts published prior to its annual meeting on 1^st July, held via Zoom.

In the report, on page 14 it says: “The Finance department has undergone a major review of its processes, systems and procedures.

“As part of gaining that financial stability we have identified that our tax position was not properly ordered and that has led to a significant payment to HM Revenue and Customs of outstanding VAT which has arisen through mis-definition of our liabilities and exemptions over a number of years.

“We are confident that Propertymark’s finances are now on a sure footing.”

Membership dip

Writing large cheques to HMRC has not come at an ideal time – Propertymark’s annual report warns of likely reductions in membership in the coming months as Covid forces more agents to shut up shop or sell their businesses to competitors.

“To ensure financial stability for the future and recognising the potential pressures on Group income the organisation continues to review its operating procedures,” its annual report says.

The Negotiator approached Propertymark to ask how large the payment was to HMRC.

In response a Propertymark spokesperson said: “The financial accounts were signed off at the AGM and as the Head of Finance said at the AGM, the VAT declaration was an entirely voluntary declaration.”

But industry consultant Andrew Stanton says the VAT error is ‘serious’ because “it’s the government who passes acts of law that legislate on how homes are sold and rented in the UK and it takes great store from industry bodies.

“As such these bodies should be decent and fit for purpose; if judged by the proposed ROPA guidelines would the NAEA Propertymark fail muster?”.

Propertymark earlier this month announced a major restructure of the organisation following the retirement of NAEA chief Mark Hayward.