Following the government’s publication of the ‘no-deal’ technical notices covering indirect taxes (reported in October’s Tax Adviser ), CIOT representatives have met with parliamentarians and representatives from HM Treasury to discuss the impact to customs duty, VAT and excise duty. It is important to note that arising points for a ‘no deal’ position could be equally relevant when the UK fully exits the EU, and possibly during a transitional period, depending upon what is agreed.
The government has published technical notices covering indirect taxes as part of its contingency planning for March 2019, should the UK exit the EU with no withdrawal agreement in place. Many issues could still be relevant for potential future ‘deal’ scenarios.
The ATT and CIOT have commented on a draft discussion paper which sets out HMRC’s policy views following a number of recent court decisions concerning whether activities are business or non-business for VAT purposes.
Whilst split payment might accelerate and secure the payment of an amount representing VAT to HMRC, it will inevitably bring complexity for businesses, payment handlers, advisers and HMRC. It is vital that these complexities and costs are fully understood before split payment is progressed, to ensure that the benefits sufficiently outweigh the costs.
HMRC have advised us that the long-awaited update to VAT Notice 700/9: Transfer of business as a going concern is to be published shortly and have given us the opportunity to provide comment on the final draft.
The impact of unclear and out-of-date guidance can be a significant barrier to the smooth and fair operation of the tax system. This is an issue that our members regularly contact us about. What can be done to improve the current situation?