Anti-avoidance ― introduction ― pre-1 January 2018

By Tolley
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The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Anti-avoidance ― introduction ― pre-1 January 2018
  • What is VAT avoidance?
  • Notifying HMRC
  • Connected persons
  • Features of a scheme
  • Penalties
  • Corporate offences of failure to prevent the facilitation of tax evasion
  • Online marketplaces and fulfilment houses
  • Appeals

This guidance note provides an overview of how a business, or its adviser, is required to notify HMRC if it enters into a VAT avoidance scheme. Anti avoidance ― listed schemes, Anti-avoidance ― hallmark schemes and Anti-avoidance ― analysis of relevant case law guidance notes.

VAT Notice 700/8 

Please note that HMRC has replaced the legislation contained in VATA 1994, s 58A and Sch 11A with a new Schedule that extends the disclosure regime to the majority of indirect taxes with effect from 1 January 2018. Further details on the changes can be found in the Disclosure of tax avoidance schemes for VAT and other indirect taxes (DASVOIT) - introduction guidance note.

What is VAT avoidance?

HMRC views VAT avoidance as any arrangement or transaction that a party enters into that is intended to give it, or another party, a VAT advantage when compared to another course of action.

VATA 1994, Sch 11A; The Finance (No 2) Act 2005 (Appointed Day and Savings Provisions) Order 2005, SI 2005/2010, s 6 (subscription sensitive); The Value Added Tax (Disclosure of Avoidance Schemes) (Designations) Order 2004, SI 2004/1933 (subscription sensitive) as amended by The Value Added Tax (Disclosure of Avoidance Schemes) (Designations) (Amendment) Order 2005, SI 2005/1724 (subscription sensitive); The Value Added Tax (Disclosure of Avoidance Schemes) Regulations 2004, SI 2004/1929 (subscription sensitive) as amended by The Value Added Tax (Disclosure of Avoidance Schemes)(Amendment) Regulations 2005, SI 2005/2009 (subscription sensitive); De Voil Indirect Tax Service V5.213, V2.210, V3.407 (subscription sensitive)

It should be noted that businesses are entitled to structure their tax affairs so they can obtain a VAT advantage providing their actions cannot be viewed as being dishonest. However, HMRC does need to be notified if the businesses decides to structure theirs tax affairs in order to obtain a tax advantage as HMRC may decide to challenge the use of the scheme and

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