VAT Update

With speculation of the VAT threshold reducing, the budget was very uneventful for VAT. The compulsory registration threshold of £85,000 has been frozen until at least March 2020; the de-registration limit of £83,000 was also frozen until this date.

Other VAT points mentioned in the budget include:

  • The next Finance Bill will introduce joint and several liability provisions for online marketplaces. This will mean that the platform provider has to pay any UK VAT that has not been accounted for. The online marketplace must also show third party’s VAT registration numbers where appropriate. This is an attempt to reduce the large amount of VAT lost in this area due to fraud.
  • HMRC is also now to consult on VAT fraud within the construction sector to make the purchaser responsible for the VAT on labour services rather than the suppliers.
  • UK VAT grouping provisions will be summarised in a document due on 1 December 2017 and hopes to include the possible membership requirements to UK VAT groups and the concept of control.

Although not part of the budget, please do be aware that all VAT records have to be maintained digitally from April 2019. You should consider how your VAT records are maintained and the options available to you.

The content of this article is for general information only and does not constitute tax advice. It should not be relied upon and action which could affect your business should not be taken without appropriate professional advice.

Written by Kate Bell (née Bailey) BA(Hons) ACA ACCA

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