Anti-avoidance ― introduction ― pre-1 January 2018

By Tolley
Anti-avoidance ― introduction ― pre-1 January 2018

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; The Value Added Tax (Disclosure of Avoidance Schemes) (Designations) Order 2004, SI 2004/1933 as amended by The Value Added Tax (Disclosure of Avoidance Schemes) (Designations) (Amendment) Order 2005, SI 2005/1724; The Value Added Tax (Disclosure of Avoidance Schemes) Regulations 2004, SI 2004/1929 as amended by The Value Added Tax (Disclosure of Avoidance Schemes)(Amendment) Regulations 2005, SI 2005/2009; De Voil Indirect Tax Service V5.213, V2.210, V3.407

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

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