Missing trader fraud, which involves traders importing VAT-free mobile phone and computer parts and then holding onto the VAT instead of handing it over to the Treasury, is believed to have cost the government £2.5bn in lost revenues last year.
Under a new law, businesses can now be held jointly and severally liable for the missing VAT even if they did not know the goods they received were part of a scam.
In effect, the problem has now been outsourced to the companies themselves who would, otherwise, face the threat of extra VAT bills as a result of not uncovering the deception of illegal suppliers.
The Financial Times reported James Bullock, head of tax litigation at KLegal, as saying this new requirement would be a ‘big extra burden on legitimate traders’.
Making Tax Digital will impose significant additional tax compliance costs on small businesses for little or no medium term benefit, tax and small business experts told MPs
MHA MacIntyre Hudson has partnered with cloud accounting software provider Xero ahead of the government’s requirement for digital records
The drive towards a fully digital tax regime is an admirable one, but mandation is simply wrong, according to one of the UK's most senior tax technology practitioners - Paul Aplin
Does Darwin's theory apply to taxation? Colin ponders...