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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