Apr 08 2019
UK Sets Out Upcoming VAT Reform Initiatives
The UK's Chancellor, Philip Hammond, delivering the Spring Statement earlier this month, announced a number of upcoming VAT reform projects.
He announced that in the coming months the UK Government will release a policy paper that will explore a potential reform to VAT refund rules for central government, with the aim of reducing administrative burdens and improving public sector productivity.
Further, it will launch a call for evidence on simplification and improvement of the VAT Partial Exemption regime, which deals with input tax recovery for businesses that make exempt and taxable supplies, and the Capital Goods Scheme. This will seek to ensure they are as simple and efficient for taxpayers as possible. This follows on from the recommendations of the Office of Tax Simplification, which have looked in detail at the UK's VAT system and possible areas for improvement.
Finally, the UK Government will release HM Treasury's findings and recommendations following a review of VAT administration in the Isle of Man after the Paradise Paper allegations. The Isle of Man operates a regime equivalent to the UK and shares revenue but it was alleged, following the leak of Appleby's confidential files, that the Isle of Man was facilitating VAT avoidance on aircraft leasing. The allegations were made by media associated with the International Consortium of Investigative Journalists, who broke the "Paradise Papers" story, and center on the importation of business jets via the Isle of Man into the EU.