In line with the Government’s digital agenda, HM Revenue & Customs will introduce an enhanced and streamlined service for VAT registration, deregistration and variations of business details. The online platform will be available from October 2012. With effect from 1 December 2012, the registration threshold for non-UK established businesses will be removed requiring businesses without a UK establishment who make taxable supplies in the UK to register for UK VAT.
Baker Tilly analysis
Although there will undoubtedly be a number of technology related practical issues to be addressed, a VAT online registration, deregistration and variants thereof will provide clear benefits for both taxpayers and HMRC.
The use of the new online facility will not be mandatory and paper based alternatives will still be available, but, provided the online services available are easy to access and simple to use, much of the current delays experienced in routine amendment and data maintenance of VAT registrations will be reduced. It is hoped that some of the variants to registration available online will include additions and removals to VAT group registration and ‘options to tax’, although these particular issues are not addressed in the Draft Finance Bill.
The removal of a VAT registration threshold for non-UK established businesses is consistent with European VAT law and it is anticipated that this action will combat possible tax fraud, evasion, possible abuse and any distortion faced by UK businesses in competition with non VAT registered overseas businesses.
The Draft Finance Bill also advises of the intention of HM Revenue & Customs to remove the requirement to prescribe 20 VAT forms in secondary legislation. Under existing legislation, changes in content, or the removal or addition of VAT forms require the review and consent of Parliament. Under the proposed legislation the content or application of VAT forms would however be determined by HM Revenue & Customs thereby potentially increasing the administrative burden of taxpayers without the existing checks and balances afforded by Parliament.