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Consultations | 9
VAT COLLECTION
The government seeks to ensure a level playing
ield, by removing any unfair advantage overseas
businesses may have over UK businesses.
HMRC estimates growth in online shopping has
resulted in signiicant losses of VAT. It is estimated
that between £1 billion and £1.5 billion was lost
in 2015/16.
The government introduced packages of measures
at both Budget 2016 and Autumn Budget 2017 to
tackle the issue of overseas businesses selling
goods to UK consumers without paying the correct
UK VAT.
In March 2017, HMRC published a call for evidence,
seeking views on the feasibility of a ‘split payment’
collection method for VAT as a further step in
preventing this type of non-compliance.
A new consultation has been launched on VAT split
payment, which seeks to determine steps that could
be undertaken to allow VAT to be extracted from
overseas sellers.
The thrust of the measure will be to harness new
technology in the payments industry to collect VAT
on online sales in real time and transfer it directly
to HMRC.
There appears to be little immediate impact for
businesses which conduct their trade entirely within
the UK, but businesses trading internationally could
face additional VAT compliance issues.
VAT, AIR PASSENGER DUTY AND
TOURISM IN NORTHERN IRELAND
Tourism makes a valuable contribution to the
economy in both Northern Ireland and the rest of
the UK. Concerns have been raised about the impact
of VAT and air passenger duty (APD) on tourism,
particularly in Northern Ireland.
The geographical situation of Northern Ireland,
with a shared land border, and lower rates of VAT in
the Republic of Ireland on certain tourism-related
items and no air travel tax (the Republic of Ireland’s
equivalent of APD) are particular concerns.
The government wants further evidence to
understand the concerns about the sector, that
demonstrates the signiicance of any impacts of
VAT or APD on tourism, or that helps show how
VAT or APD might be used to support the growing
success of tourism in Northern Ireland.
“Impact of VAT and
air passenger duty in
Northern Ireland to be
reviewed."
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SPRING STATEMENT 2018