Glossary of commonly used VAT terminology

Produced by Tolley
Glossary of commonly used VAT terminology

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

  • Glossary of commonly used VAT terminology

The table below provides a glossary of the most common VAT terms used.

VAT termDescription
Acquisition taxPrior to 1 January 2021, for Great Britain, if a VAT registered business customer purchased goods from a supplier in an EU member state, no VAT was charged by the supplier on the goods supplied as long as the goods are removed from the supplier’s EU member state. When the business customer received the supply, it was required to account for any VAT due on the cost of the goods received via its local VAT return. Please see the Buying goods from other EU vendors (rules until 31 December 2020) guidance note.
Businesses acquiring goods in Northern Ireland from an member state are still required to account for acquisition tax.
Anti-avoidanceHMRC has introduced legislation that is intended to prevent businesses from obtaining what it considers to be an unfair VAT advantage through use of VAT planning arrangements. This legislation is commonly called ‘anti-avoidance’ legislation. See the Disclosure of tax avoidance schemes for VAT and other indirect taxes (DASVOIT) ― introduction guidance note for the current rules and the Anti-avoidance ― introduction ― pre-1 January 2018 guidance note for more information on the pre-January 2018 rules
AssessmentsIf HMRC discovers an error on a VAT return or a business makes a voluntary disclosure, etc, then it will raise an assessment to correct the error found. Assessments can be raised for under-declarations and over-declarations of VAT. See the Assessments guidance note
AvoidanceThis is where a business has usually implemented a planning scheme that has the sole purpose of reducing the amount of VAT payable to HMRC. The business will not have evaded VAT if they enter into one of these types of arrangements. Under anti-avoidance legislation, the business may need to notify HMRC that it has entered into such an arrangement. See the Disclosure of tax avoidance schemes for VAT and other indirect taxes (DASVOIT) ― introduction guidance note for

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