Since its introduction in 1973 VAT has been subjected to a continuous process of evolution and change. It is now widely recognised as being complex to administer which in turn creates challenges when it comes to VAT compliance.
The Office of Tax Simplification (OTS) has agreed with the Chancellor to carry out a review of numerous aspects of VAT to consider whether the VAT system is working as it should in todays economy. It will also seek to identify opportunities for simplification.
The objective is to simplify aspects of the VAT system from both a technical and administrative perspective.
Some of the areas that the review will consider are detailed below:
- the impact of raising or lowering the VAT threshold
- the demand and practical challenges associated with a more formal system for obtaining VAT rulings, TOGC’s for example
- the VAT penalties regime and appeals process
- the potential to simplify certain VAT methodologies such as opting to tax and Capital good scheme
This review will concern itself with the VAT rates already in place.
Neither will it consider the implications of Brexit – such as the impact on financial services, statistical reporting and EU cross border rules.
A report detailing the outcome of this review will be published in Autumn 2017. We wait with interest, those of you that have been around long enough will remember the last time VAT simplification measures were introduced…
If you’d like to read more of our blogs on the subject of VAT take a look here.
