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HMRC Adds To Main VAT Registration Guide

by Jason Gorringe, Tax-News.com, London

28 September 2016


The UK tax authority, HM Revenue and Customs, has updated VAT Notice 700/1 on value-added tax (VAT) registration following law changes intended to prevent VAT evasion.

The Notice has been updated following the introduction of new powers for HMRC to hold an online marketplace jointly and severally liable for the unpaid VAT of an overseas seller trading goods in the UK via that online marketplace.

The measure is intended to provide HMRC with the tools necessary to tackle those overseas businesses that do not comply with UK VAT rules and help level the playing field for all businesses.

If an overseas business, having been contacted by HMRC fails to comply with HMRC's directions and/or continues to be non-compliant, HMRC will contact the relevant online marketplace through which the overseas business is trading. It will put the online marketplace on notice that it may be held jointly and severally liable for the VAT in respect of the overseas business's future taxable sales through that online marketplace. The notice will also set out a period of time (normally 30 days) during which the online marketplace can avoid being held jointly and severally liable either by securing compliance from the overseas business or removing it from its online marketplace. After this period of time, the online marketplace will be held jointly and severally liable if no such action has been taken.

The Notice also contains an update HMRC's power to direct some non-established taxable persons (NETPs) to appoint a VAT representative based in the UK.

TAGS: compliance | VAT tax authority guidance | VAT registration / deregistration | tax | business | value added tax (VAT) | VAT cross-border transactions | law | United Kingdom | tax authority | VAT compliance matters

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