HMT HMRC consultation outcome: Alternative method of VAT collection – split payment

Released 7 November 2018

HM Treasury and HMRC have published the outcome to the consultation on options for a potential split payment mechanism to combat online VAT fraud.

The consultation Alternative method of VAT collection – split payment, which ran from 13 March 2018 to 29 June 2018, sought views on possible options for how a potential split payment mechanism could work to combat online VAT fraud. The response document notes that the Government recognises the complexities involved in splitting a payment under current UK VAT rules and the need to address concerns raised, particularly regarding simplicity. The response further notes that the Government views split payment as a potential long-term solution but accepts it would take both HMRC and industry time to develop and implement successfully. The Government recognises it will need to take into account the potential costs to businesses, particularly for small and micro businesses, and the need to ensure sufficient lead-in time for businesses to develop any necessary supporting systems. HMRC and HM Treasury will set up a formal industry working group to further discuss, refine and explore how a potential split payment model could work for VAT.

For more information, see Consultation outcome Alternative method of VAT collection – split payment.

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