Liz Maher, Centurion VAT Specialists Consultant, takes the stage in this blog to share her thoughts on the Tax Day Consultations concerning VAT.

Little of major change

Should any reader have an interest in a catch-up on Tuesday’s Tax Consultation papers then a link to the HMRC Tracker can be found here. Centurion VAT’s Environmental Tax expert Mike has already picked out his particular favorites, and you can find his comments in this blog.

From the VAT perspective then there are a few obvious ones to pick out – they have the word ‘VAT’ in the title for a start – but one or two of the others caught his eye as well. As Mike’s already inferred from the environmental tax side, there was little of major change on the VAT side either. Some of these documents continue the conversation that began with the Office of Tax Simplification Review and for those hoping for an increase in the Partial Exemption de minimis levels or a major hike on the Capital Goods Scheme threshold, you will be disappointed.

Of wider interest and as a backdrop to the direction of travel in tax administration more widely, Liz highlights the papers on:

  • Notification of uncertain tax treatment by large business
  • Promoters of Tax avoidance
  • Tax Administration Framework
  • Compulsory Professional Indemnity (PI) Insurance for Tax Advisers

“To be honest I’d assumed that PI cover was the usual practice for any adviser – it’s a protection we’ve always had in place here at Centurion VAT.”

Liz Maher, VAT Specialist Consultant

PI cover and uncertain tax treatment

Liz: “To be honest I’d assumed that PI cover was the usual practice for any adviser – it’s a protection we’ve always had in place here at Centurion VAT but clearly there are some ‘advisers’ operating without such cover so I would see this as a step in the right direction for clients. Whilst these documents are still in consultation, in respect of the first one – the ‘uncertain tax treatment’ point – they already appear to be having an effect in the way that some large business approach what would have been innocuous VAT steps.”

“An example we’ve seen was a large corporate disposing of a commercial building to an educational institution that was unprepared to accept their disapplication of the option to tax on a part of the value of the supply. The purchaser was left with having to approach HMRC on the matter to obtain written clearance – a challenge at any time in terms of getting a comment on what, we saw, as a matter which exposed the vendor to little or no risk but an illustration of the concern that large organisations are having about creating any potential exposure to question by HMRC going forward.”

“The Tax Administration Framework paper also points to the digital direction of travel over the next 10 years across a range of taxes with Making VAT Digital leading the way it has to be said.”

Liz Maher, VAT Specialist Consultant

Tax Administration Framework

“The Tax Administration Framework paper also points to the digital direction of travel over the next 10 years across a range of taxes with Making VAT Digital leading the way it has to be said. ‘Real-Time’ tax reporting and administration feels only a matter of time away in the UK and other tax administrations across the globe are leading in this regard, so I’m sure HMRC and the Treasury will look with interest at their systems and successes.”

General comments

If you have any contribution to make to the discussions then HMRC will welcome input whether independently or through your trade, sector or business network. More general comments on past consultations to note include:

  • VAT grouping establishment, eligibility, and registration: expect a summary of responses in the summer
  • VAT and value shifting: a summary of responses will be published in the summer
  • VAT and public sector refunds: this could be a major VAT shift in recovery rules, so we hope to see more news in the summer

Need tax advice?

As ever if you have issues on the VAT or environmental tax side and need practical support now, then get in touch with Centurion VAT Specialists – [email protected] – or contact us.

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