The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.
This guidance note provides details of the hallmarks for VAT and indirect tax arrangements where it is necessary for the promoter or the user to notify HMRC under the DASVOIT regulations. This note should be read in conjunction with the Disclosure of tax avoidance schemes for VAT and other indirect taxes (DASVOIT) ― introduction, DASVOIT ― notifiable arrangements and making the notification and DASVOIT ― penalties and powers guidance notes.
The relevant anti-avoidance legislation specifies a number of descriptions of arrangements that HMRC refers to as hallmarks. Hallmarks 1(a), 1(b), 2, 3 and 4 apply across all the indirect taxes including VAT and hallmarks 5, 6, 7 and 8 apply only to VAT.
HMRC states in its guidance that the hallmarks are not mutually exclusive and that an arrangement can be hallmarked by virtue of satisfying one or more of the hallmarks outlined below. HMRC also goes on to state that the absence of a hallmark for a particular arrangement cannot be viewed as constituting practices that will be acceptable to HMRC. HMRC will obviously take steps to try and prevent any form of VAT or other indirect tax avoidance taking place.
However, arrangements are only notifiable where they meet all of the conditions laid down in Finance (No 2) Act 2017, Sch 17, para 3, which are arrangements that:
fall within any description prescribed by the Treasury by regulations (hallmarks)
enable, or might be expected to enable, any person to obtain a tax advantage in relation to any indirect tax that
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