Starting from 1 September 2022, UK’s HMRC will begin a new system of processing incorrect VAT returns from foreign online marketplace traders.
As of now, once the HMRC identifies wrong VAT returns, it requires the business owners to resubmit the details and provide explanations. The new process will simplify the correction of inaccurate returns. Instead of further communicating with the online sellers, HMRC will send them their VAT assessment based on the data from the HMRC databases.
The statutory review rights and appeals are maintained. A 30-day appeal period is applied for the HMRC’s tax assessment. It means that the business owner or their tax agent can provide additional details and get the VAT assessment corrected.
As online marketplaces and their sellers both share the responsibility of VAT collection and payments, in case of incorrect VAT returns, HMRC will issue a joint notice for both parties. If there are any unpaid tax duties, HMRC has the right to block the seller’s account. It is planned that the assessments will apply to the period prior to the end of the year 2022 and will be sent to the seller’s registration address in the UK.
Do you want to learn how to avoid VAT assessments or processes if you receive one? Reach out to our team at Vatabout and get professional consultations from taxation experts.