HMRC is modifying the process in which it conducts VAT assessments for foreign online marketplace sellers who submit wrong returns. The Chartered Institute of Tax published a note to inform impacted businesses and their Tax Agents of a step change in VAT compliance in this area.
Starting 1 September 2022, HMRC will begin sending VAT assessments instead of asking for details from businesses when its data shows that the VAT returns are inaccurate. HMRC is making this change because they already possess the necessary information and do not need businesses to provide repeat information.
The assessments will:
Sellers will maintain their usual appeals and statutory review rights.
HMRC will also inform any online marketplaces used by the seller and issue a joint and several responsibility notice, making the marketplace potentially responsible for any unpaid VAT. The seller’s account will most likely be blocked as a result.
How can we help?
A VAT Assessment has a 30-day appeal period, so vigilance and rapid action are crucial if you get one in September. Knowing the rules and potential solutions in the VAT assessment process is half the battle. Contact GVC if you want to know more about dealing with UK tax assessments.