The Chartered Institute of Taxation (CIoT) has warned that HM Revenue & Customs’ (HMRC) new measure to crack down on abuse of a VAT simplification scheme for small businesses may have “unwelcome consequences” for tax-compliant businesses and may even be ineffective. Read more
Last month the RAC backed calls for the amount of fuel duty and VAT to be shown on the receipt every time a driver fills up at a petrol station, saying that “greedy ministers” should “come clean”. Read more
The Scotch Whisky Association (SWA) claims that drinkers in the UK pay more than a quarter of the EU’s entire spirits tax revenue, despite only accounting for 11 per cent of the bloc’s population. Read more
The British Hospitality Association (BHA) has warned that uncertain political and economic times mean it is more important than ever that the hospitality and tourism industry can compete on a level playing field. Read more
New research suggests that small firms continue to struggle to find the cash to pay the taxman, as the overdue VAT bill owed to HM Revenue & Customs (HMRC) rose from £2.55bn in 2014-15 to £2.59bn in 2015-16. Read more
According to HM Revenue & Customs (HMRC), there was a ten-fold increase in the number of internet retailers registering for VAT since the tax authority gained new powers in regards to overseas sellers. Read more
The Government is to consult on whether to make changes to UK VAT grouping and on the interaction between VAT grouping and cost sharing provisions, in light of two recent decisions by the European Court of Justice (ECJ). Read more
In last week’s Autumn Statement, Chancellor Philip Hammond announced significant changes for the amount of VAT that many small businesses using the VAT Flat Rate Scheme will have to pay from 1 April 2017. Read more
With Chancellor Philip Hammond’s first Autumn Statement fast approaching, calls are coming in from all quarters for him to cut the rate of VAT and, according to one report, free up almost £20bn in spending power for businesses. Read more
A recent report from the Institute for Economic Affairs (IEA) proposes the abolition of a number of taxes, such as National Insurance (NI), excise duties on alcohol and tobacco and a shake-up of the VAT system.
According to the IEA’s report, entitled Taxation, Government Spending and Economic Growth, VAT should be reduced to a flat rate of 12.5 per cent, with most of the current exemptions removed.
In fact, the report argues, 20 current taxes should be axed and replaced by a simpler system that would include new taxes on land-value and an effective VAT charge on elements of housing costs, including rents, while income and distributed corporate profits would be taxed at a flat rate of 15 per cent.
As a package of measures, the IEA claims that the reforms would lead to increases in employment, productivity and wages through a lessening of the tax burden. Additionally, it suggests this would disproportionately benefit low-income workers who are more likely to be in insecure jobs, low-paid employment or unemployed.
In total, the think tank says that the poorest 40 per cent of the country would all see tax cuts in excess of 10 per cent.
Meanwhile, other bodies are also calling on the Government to cut VAT, with a spokesman for Thomas Cook suggesting a reduction in the rate of tourism VAT from the current 20 per cent to the 5 per cent average enjoyed in other European countries.
As he points out, with Brexit looming, even though the falling pound means the UK is currently around 15 per cent cheaper for overseas visitors, there are fears over the longer-term effects, particularly if the Government opts for a ‘hard Brexit’, which could see two million fewer visitors to the UK by 2020.