Budget 2017: VAT issues

In his Budget on 8 March 2017 the Chancellor of the Exchequer, Philip Hammond, covered four VAT items. Only one of which I heard mentioned in his speech. The rest were covered in the supporting documents published after the Chancellor finished his speech in the House of Commons.

VAT registration limit

The VAT registration limit will increase by £2,000 from £83,000 to £85,000 on 1 April 2017.

I have updated the VAT Registration Limits page.

Mobile phone roaming charges

UK VAT is to be applied to mobile phone roaming charges for UK residents travelling outside the EU. UK VAT is already charged on roaming charges when travelling in other EU member states. No announcement about the date that this will start has been made. It will require the legislation to be changed and the draft legislation is expected to be published before Parliament’s summer recess.

Tackling VAT fraud

Two areas have been identified as requiring attention. These are:

  1. The provision of labour in the construction industry; and
  2. Tackling fraud by overseas businesses using online platforms to sell goods in the UK.

There is to be a consultation on the issues arising from the fraud apparently being perpetrated in the provision of labour in the construction industry.

There is to be a call for evidence on further methods of ensuring VAT is collected on sales made by overseas businesses using online platforms in the UK.

Both documents are expected to be published on 20 March 2017.

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