HM Treasury Responds On The EC Proposals To Tackle VAT Fraud
Sadly Steve Allen died in July 2011. His wife Leah would like to thank all those who know Steve and helped contribute to his success. She has recommends Steve's clients and anyone who is interested in this article topic to contact Rob McCann from “The Vat people” on (tel) 0161 477 6600 . Please make reference to Steve Allen.
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Steve Allen, Director of VAT Solutions (UK) Ltd, highlights the key
areas of tax evasion potentially affected by the EC's recent proposals.
Earlier this year, the European Commission issued its proposals to combat tax
evasion, and because they are aimed at speeding up the collection and exchange
of information, there is likely to be a wide reaching impact on businesses.
In May, the Treasury responded by confirming that the proposed rules had not
been discussed with Member States, and some elements were unexpected. The
Treasury has highlighted three key areas which would be affected, and these are
VAT Returns, EC Sales lists and the Time of Supply changes. These key areas are
The proposal provides for compulsory monthly VAT returns, with the
expectation that electronic submission be the norm. However, it does provide for
non-electronic means, and also longer VAT periods of up to one year for
businesses under a certain threshold (whose annual intra-EU acquisitions of
goods and reverse charge services do not exceed EUR 200,000). There would also
be a requirement for businesses to show the VAT-exclusive total value of their
purchases of services subject to the reverse charge, which would be in a
separate new box on the return.
EC Sales Lists
The proposal provides for compulsory EC sales lists, for the providers of
goods and services subject to the reverse charge to businesses in other Member
States. These must be submitted on a monthly basis no later than one month after
the period end. The proposal allows for annual lists to be submitted by traders
who are below a certain threshold, and for certain categories of business to use
'Time of supply' changes
The existing options would be removed and replaced with a tax point on the
completion of service, unless an earlier tax point is created by a payment or
invoice. For continuous supplies of services, there would be an annual tax point
where there has been no earlier invoice or payment.
With regard to the new EC Sales lists, the Treasury says the proposed
requirements were largely as anticipated. However, the requirement for
compulsory monthly VAT returns and the 'time of supply' changes were not
expected. Whilst it was establishing why the Commission had included these
elements, the Treasury sought the views of businesses and advisers on these
elements as well as on the proposal as a whole. Feedback was requested to be
sent direct to the Treasury by May 20th, but so far, there has been no
subsequent public announcement on what the gist of the comments were.
About the Author
Steve Allen is the
Director of VAT Solutions (UK) Ltd, an established independent firm of Chartered
Tax Advisers, formed by Andrew Needham and Steve Allen. Both not only are
respected tax advisers, but have worked for both Customs & Excise and one of the
top four accountancy firms for many years. This mean that their team know both
sides of the equation and are truly experts in this field.
The company has a cross-section of clients from multi-national companies
through to medium-sized and numerous smaller regional firms of accountants and
solicitors. They produce a regular publication 'VAT Voice', which can be
downloaded directly from their website
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Article Published/Sorted/Amended on Scopulus 2008-09-04 08:44:34 in Tax Articles