ACCA Urges Major Reform Of UK VAT System

by Amanda Banks, Tax-News.com, London

24 October 2001

The UK's Association of Chartered Certified Accountants (ACCA) has released a statement urging the Chancellor of the Exchequer Gordon Brown to end the complexity and lack of clarity of the VAT system by either simplifying it or replacing it with a sales tax.

ACCA says that this major call for an overhaul of the tax system comes after a succession of highly publicised cases, in which Customs & Excise have tried to define the complex VAT rules, at the taxpayers expense.

Chas Roy-Chowdhury, Head of Taxation at ACCA, commented: 'Gordon Brown needs to review the system with the UK's European Union partners in order to develop a coherent strategy for creating a reformed and simplified VAT/Sales Tax system which does not stray back to present levels of complexity.'

He added: 'It is not acceptable that UK businesses should have both to meet high compliance costs in relation to VAT and to pay again to fight legal battles with Customs & Excise in the VAT minefield. Even when companies win their cases, Customs & Excise often introduces further blocking tactics to prevent those business receiving back the overpaid tax, on the grounds that it will not be possible to track down the customers who originally paid the VAT in order to reimburse them.'

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