United Kingdom Publishes Guidance on Supply-Splitting Tax Avoidance Schemes

Sovos
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

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Sovos is a leading global provider of software that safeguards businesses from the burden and risk of modern transactional taxes. As VAT and sales and use tax go digital, businesses face increased risks, costs and complexity. The Sovos Intelligent Compliance Cloud is the first complete solution for modern tax, giving businesses a global solution for tax determination, e-invoicing compliance and tax reporting. Sovos supports more than 7,000 customers, including half of the Fortune 500, and integrates with a wide variety of business applications. The company has offices throughout North America, Latin America and Europe. Sovos is owned by London-based Hg. For more information visit www.sovos.com and follow us on LinkedIn and Twitter.
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