V5.175 VAT debts—recovery proceedings in an EU member state

Part V5 Compliance, enforcement and appeals

V5.175 VAT debts—recovery proceedings in an EU member state

V5.175 VAT debts—recovery proceedings in an EU member state

The EU mutual assistance recovery directive1 and regulations2 requires member states to enact national legislation to facilitate mutual recovery of undisputed debts in respect of VAT. Where, therefore, an amount of UK VAT due to HMRC is not recoverable in the UK (eg because the taxpayer concerned has moved to an EU member state and no longer has any assets in the UK), HMRC may request the competent authority of the member state in which the debtor now lives, works or carries on a business to take recovery proceedings on HMRC's behalf in that member state's national court. The proceedings will be commenced under the appropriate national legislation giving effect to the directives and will be commenced in the name of the competent authority.

The relevant national legislation in the UK is contained in FA 2011, Sch 25. It applies to the recovery of sums becoming due at any time, ie both before and after Royal Assent to FA 2011.

Implementing regulations3 make procedural, supplementary and adaptive provision for that Schedule. They also supplement Regulation (EU) No 1189/2011, which has direct effect4.

A transposition table setting out the interaction of the UK and EU legislation is set out below.

Directive 2010/24/EUImplementation
Article 2 Extends the scope of the rules to all taxes and duties levied by or on behalf of the member state's territorial or administrative subdivisions, including local authorities.FA 2011, s 87(1) and para 7 of Sch 25 set

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