United Kingdom Publishes Guidance on Supply-Splitting Tax Avoidance Schemes

Kaitlyn Smethurst
June 28, 2017

On June 26, 2017 Her Majesty’s Revenue and Customs (HMRC) published Spotlight 38, which divulges the HMRC position on supply-splitting tax avoidance schemes. The publication makes clear that HMRC considers any type of VAT supply-splitting arrangements, when designed to reduce the amount of VAT owed, to be tax avoidance. The publication goes on to state that those such arrangements “should be taxed as a single supply where (a) multiple suppliers are used where the same elements could be provided by one supplier, and/or (b) where the customer has no opportunity to decline to take one on of the individual elements.” HMRC has stated that it will continue to challenge these arrangements, through legal action if necessary. 

For more information, and to see the original publication please see the HMRC website here. 

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Kaitlyn Smethurst

Katie Smethurst is a Regulatory Counsel at Sovos. Within Sovos’ Regulatory Analysis function, Katie focuses on global sales tax and VAT issues, supporting both the tax determination and reporting engines. Katie received her B.A. in International Relations and Spanish from Roger Williams University and her J.D. from Suffolk University Law School. She is a member of the Massachusetts and New Hampshire Bars.
Share this post

North America
June 6, 2024
Observations and Predictions: The Future of Tax and Compliance

When I became the CEO of Sovos one year ago, I knew that I was stepping into an innovative company in an industry primed for a seismic transformation. However, even with this knowledge in place, I must admit that the speed and scope of change over the past year has been extraordinary to witness. Here […]

EMEA IPT
July 8, 2024
Hungary Insurance Premium Tax (IPT): An Overview

Regarding calculating Insurance Premium Tax (IPT), Hungary is the only country in the EU where the regime uses the so-called sliding scale rate model.

North America ShipCompliant
July 3, 2024
The Prospects and Perils of AI in Beverage Alcohol

I recently had the privilege of speaking on a panel at the National Conference of State Liquor Administrators (NCSLA) Annual Conference, a regular meeting of regulators, attorneys and other members of the beverage alcohol industry to discuss important issues affecting our trade. Alongside Claire Mitchell, of Stoel Rives, and Erlinda Doherty, of Vinicola Consulting, and […]

North America ShipCompliant
June 27, 2024
Shifting Focus: How to Make Wine Country Interesting to Millennials

Guest blog written by Susan DeMatei, President, WineGlass Marketing WineGlass Marketing recently conducted a study to explore how Millennials and Gen X feel about wine, wine culture and wine country. The goal was to gain insight into how we can make wine, wine club and wine country appealing to these new audiences. We’ll showcase in-depth […]

North America Sales & Use Tax
June 24, 2024
Illinois to Adjust Sales Tax Nexus Rules in Light of PetMeds Threat

Illinois is poised to change their sourcing rules again, trying to find their way in a world where states apply their sales tax compliance requirements equally to both in-state and remote sellers. With this tweak, they will effectively equalize the responsibilities of remote sellers with no in-state presence, to those that have an Illinois location. […]

EMEA VAT & Fiscal Reporting
June 21, 2024
ViDA Rejected Again – Europe Misses Another Chance to Harmonize e-Invoicing

During the latest ECOFIN meeting on 21 June, Member States met to discuss if they could come to an agreement to implement the VAT in the Digital Age (ViDA) proposals. At the ECOFIN meeting in May, Estonia objected to the platform rules being proposed, instead requesting to make the new deemed supplier rules optional (an […]