VAT: Evasion

Lord Palmer of Childs Hill Excerpts

Monday 20th November 2017 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for pointing out what is in the new Finance Act—namely, the aim to catch non-EU businesses selling goods in the UK and avoiding VAT. However, the application of the scheme is set to widen post Tory Brexit as the EU/non-EU distinction will no longer apply. What additional resources will be allocated to this issue, given that at the same time resources will be needed to implement Making Tax Digital in April 2019, and the new customs declaration service?

[Lord Bates]

The noble Lord is absolutely right to say that there is a big change from traditional sorts of trading to online trading. It is therefore essential that HMRC tracks that in moving towards making tax digital. That is what we are trying to do. We are also saying that fulfilment houses, which are a device used to store goods for onward selling in the UK, will need to register from April next year. Perhaps most relevant to the point that he raises, we are also looking at the idea of having split taxation so that, rather than going through the declaration element, the minute that a transaction is triggered online, the tax immediately goes to the Exchequer. That seems a more sensible way forward. We consulted on that and will come forward with our proposals on it very shortly.