Spring Budget; Evasion of VAT

The issue of VAT evasion was addressed within the Budget with respect to multiple instances;

- The first of these relates to the provision of labour in the construction industry. HMRC are seeking ways to tackle missing trader VAT fraud with respect to the provision of labour.  One approach being considered is to utilise the reverse charge, resulting in the recipient of the services accounting for VAT.

- Additionally, measures are also being considered with the aim of combating overseas traders utilising online marketplaces and avoiding accounting for UK VAT due on sales of goods made to UK customers. This provides the overseas trader with a financial and competitive advantage over UK high street retailers who are obliged to account for VAT on all taxable supplies made in the UK. Therefore, a ‘split payment’ model has been proposed whereby technology would be used to directly extract the VATable element of an online sale to a UK customer at the point of purchase.

Therefore, if you or one of your clients provides labour within the construction industry, or are an overseas trader selling goods to UK customers via an online marketplace, please seek advice through our free VAT helpline to ensure that all UK VAT commitments are met.

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