V16.405 VAT reverse charge anti-avoidance amendment

Part V16 Forms and other HMRC material

V16.405 VAT reverse charge anti-avoidance amendment

V16.405 VAT reverse charge anti-avoidance amendment

Who is likely to be affected?

This measure does not directly affect any businesses or customers but provides a power to make regulations to amend certain anti-avoidance provisions.

General description of the measure

This measure allows for the disapplication of the existing anti-avoidance provision in section 55A(3) by Statutory Instrument in relation to any specified VAT reverse charge.

Policy objective

A VAT reverse charge works by changing who accounts for the VAT on specified supplies from the supplier to the customer. This only works where the customer is also VAT registered.

The anti-avoidance provisions were introduced to discourage attempts by fraudsters to escape a reverse charge measure by making supplies to non-VAT registered businesses instead and charging VAT.

This measure will allow regulations to be made to prevent unintended consequences for small businesses trading below the

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