Autumn Budget 2017 – VAT

There were no changes announced to the rate of VAT.

The VAT registration and de-registration limits have been frozen for a period of two years at £85,000 and £83,000 respectively.

The UK has one of the highest VAT registration thresholds in Europe and there will be a consultation on ‘the design of the VAT threshold’ during the two year period ending March 2020.

VAT fraud in labour provision in the construction sector

The Chancellor announced that the government will publish a technical consultation on draft legislation for a VAT reverse charge in spring 2018. A final draft of the legislation and guidance will be published by October 2018.

The measure shifts responsibility for paying the VAT along the supply chain to remove the opportunity for it to be stolen. The changes will have effect on and after 1 October 2019.

VAT: split payment for online payments

The government will publish on 1 December 2017 a response document to the call for evidence to develop a split payment model that was launched after Spring Budget 2017.

A split payment model would allow VAT to be extracted from online payments in real time. The responses to the call for evidence were broadly positive about the concept but highlighted the complexities of implementation. The response document will set out plans for further engagement with external stakeholders, in preparation for a full consultation in 2018.

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