The Treasury Committee has launched reviews into the UK VAT system.
As part of the review, the Committee’s Chair will look into the £12.6 billion of VAT that HM Revenue & Customs (HMRC) believe that they were unable to collect in 2015/16. The impact of Brexit will also be looked into.
The Committee will also investigate the aspects of VAT that cause the biggest problems for businesses with a view to how these might be improved. This will include how quickly and fairly disagreements between businesses and HMRC are resolved regarding how much VAT is due. This is because, according to the Treasury, VAT is “notoriously complex and burdensome for businesses to cope with”.
Meanwhile, following the conclusion of a consultation on Making Tax Digital (MTD), the Government has said it will now engage with stakeholders on the development of guidance for VAT regulations and new digital tax obligations.
The reforms are part of the Government’s MTD project. Under this, as of 1 April 2019, any business with a turnover of £85,000 and above will have to keep their records digitally for VAT and provide this information to HM Revenue & Customs (HMRC) through MTD-compatible software. MTD will also be available on a voluntary basis to other businesses.
If you have any queries about VAT then please contact me on 0117 945 2514.