Raworths LLP
VAT and Electronic Goods  – Take Care VAT and Electronic Goods  – Take Care

Legal Articles

Mar 15

VAT and Electronic Goods – Take Care

In order to combat ‘missing trader’ fraud, which is estimated to have cost the Exchequer hundreds of millions of pounds, HM Revenue and Customs (HMRC) have introduced measures which can, in some circumstances, make a supplier (or customer) responsible for its customer’s (or supplier’s) VAT.

The measures will apply when the goods dealt in are any of a number of electronic goods and where you should have reasonable grounds to suspect that VAT will go unpaid. It is thought that this could lead to businesses being caught out as a result of taking insufficient care, rather than being complicit in VAT fraud.

In order to minimise risk to your business, if you deal in such items you need to take ‘reasonable steps’ to establish the integrity of those with whom you have dealings. To do so, you should consider the following:

  • obtaining and checking their VAT registered number and, for a company, verifying its registration with Companies House;
  • carrying out credit checks and obtaining third-party references; and
  • checking that the business’s trading address exists and is a business premises, not a serviced office or PO box location.

HMRC recommend that extra care is taken when a deal is offered to you which seems to be particularly advantageous.

 

In December 2014, HMRC updated its guidance for business supplying digital services to private consumers.

Source: Commercial

  • « Older Entries
  • Newer Entries »

‹  Return to News / Articles

Other Articles

Mar 18

GDPR Guidance

If you have not yet taken steps to ensure your business complies with the General Data Protection Regulation (GDPR), the time to start is now: less than two months remain...

MORE

Mar 18

The GDPR and Your Firm's Pension Scheme

The press is awash with comment about the General Data Protection Regulation (GDPR), which will be fully enforced from 25 May 2018. It would be difficult for any organisation not...

MORE