UK takes VAT over the Net

Customs & Excise has accepted an Internet-based fleet car invoicing system as a mechanism for UK companies to exchange VAT invoices.

The FleetWeb system, supported by Internet service provider AutoNetica, mirrors existing electronic trading systems carried on secure, value-added networks. Until now, the Internet wasn’t considered secure enough or able to produce the necessary audit trails to be used for VAT transactions.

The Internet continues to cause headaches for tax authorities, due to the difficulty of establishing national jurisdiction over cyberspace.

In the US, for example, President Clinton last week endorsed the Internet Tax Freedom Act, which would introduce a moratorium on state and local taxes on business over the Internet.

The statement emphasises Customs’ acceptance of FleetWeb for UK-to-UK transactions between those companies meeting UK assurance requirements.

It states: ‘Pending the outcome of international discussions on a number of Internet-related taxation issues, Customs’ current acceptance with FleetWeb is given without prejudice of additional assurance requirements at some future date, should these be considered necessary.’

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