VAT & Indirect Taxes

 

Key points:

  •   VAT registration threshold increased

From 1 April 2017 the VAT registration threshold will increase from £83,000 to £85,000.  The de-registration threshold will also increase from £81,000 to £83,000.

Key points:

  •   Use and enjoyment provisions removed for mobile phone services
  •   Use and enjoyment provisions removed for mobile phone services

The current use and enjoyment provisions which enable mobile phone companies to avoid paying UK VAT when their customers use their phones outside of the EU have been removed.  This will ensure that the previous inconsistency between EU and non-EU usage of mobile phones can no longer be used by phone companies to avoid UK VAT. 

This may however result in an increase in mobile phone charges for individual users.

Key points:

  •  Tackling potential tax evasion

A consultation will take place to consider options to combat missing trader VAT fraud in the provision of labour in the construction sector, with an option being the application of the reverse charge mechanism so that the recipient of the supply accounts for the VAT.

There are also plans to introduce a new VAT collection mechanism for online sales in a bid to prevent some overseas traders from avoiding paying UK VAT.  This could allow VAT to be extracted directly by the Exchequer from online transactions at the point of purchase.

 

Key points:

  •   Tackling potential tax evasion

A consultation will take place to consider options to combat missing trader VAT fraud in the provision of labour in the construction sector, with an option being the application of the reverse charge mechanism so that the recipient of the supply accounts for the VAT.

There are also plans to introduce a new VAT collection mechanism for online sales in a bid to prevent some overseas traders from avoiding paying UK VAT.  This could allow VAT to be extracted directly by the Exchequer from online transactions at the point of purchase.

 

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