The Chartered Institute of Taxation (CIOT) and the Institute of Chartered Accountants in England and Wales (ICAEW) have issued the first in a series of fact-sheets on the impact of the UK’s withdrawal from The European Union. The main purpose of the first fact-sheet is to outline the purpose and effect of The Taxation (Cross-border Trade) Act 2018, which received Royal Assent on 13 September 2018.
The government has published the first 25 of a series of technical papers on how the UK will be affected by Brexit if on 29 March 2019 no deal with the EU has been reached. The “no deal” scenario is possible if the UK government and the EU cannot agree terms and the UK therefore becomes a third country at 11pm GMT on 29 March 2019 without a Withdrawal Agreement or a framework for a future relationship in place between the UK and the EU.
A no-deal Brexit could mean lorry queues building up at ports as the previously smooth import and export of goods in the Single Market ends, to be replaced by new customs checks. Goods which are meant to arrive ‘just in time’ or are perishable, could be subject to delay, affecting stocks, production and ultimately sales.
Below is a summary of the main VAT issues. More detail on trade, import and export procedures can be found here.
VAT before 29 March 2019
Under current VAT rules:
- VAT is charged on most goods and services sold within the UK and the EU.
- VAT is payable by businesses when they bring goods into the UK. There are different rules depending on whether the goods come from an EU or non-EU country.
- goods that are exported by UK businesses to non-EU countries and EU businesses are zero-rated, meaning that UK VAT is not charged at the point of sale.
- goods that are exported by UK businesses to EU consumers have either UK or EU VAT charged, subject to distance selling thresholds.
- for services the ‘place of supply’ rules determine the country in which you need to charge and account for VAT.
VAT after 29 March 2019 if there’s no deal
The UK will continue to have a VAT system after it leaves the EU. The VAT rules relating to UK domestic transactions will continue to apply to businesses as they do now.
If the UK leaves the EU on 29 March 2019 without a deal, the government’s stated aim will be to keep VAT procedures as close as possible to what they are now. However, if the UK leaves the EU with no agreement, then there will be some specific changes to the VAT rules and procedures that apply to transactions between the UK and EU member states.
UK businesses importing goods from the EU
In a no deal scenario the current rules for imports from non-EU countries will also apply to imports from the EU. Customs declarations would be needed when goods enter the UK (an import declaration). This means customs duty may also become due on imports from the EU customs checks may be carried out and any customs duties must be paid – import VAT would be payable on such goods.
If the UK leaves the EU without an agreement, the government will introduce ‘postponed accounting’ for import VAT on goods brought into the UK. This means that UK VAT registered businesses importing goods to the UK will be able to account for import VAT on their VAT return, rather than paying import VAT on or soon after the time that the goods arrive at the UK border. This will apply both to imports from the EU and also non-EU countries. More detail on these processes can be found in the ‘Trading with the EU if there’s no Brexit deal’ technical notice. More guidance setting out further detail on accounting and record keeping requirements will be issued in due course.
Goods entering the UK as parcels sent by overseas businesses
VAT will become due on goods sent as parcels from overseas busniesses. If the UK leaves the EU without an agreement then Low Value Consignment Relief (LVCR) will no longer apply to any parcels arriving in the UK. For parcels valued up to and including £135, the Government states that a technology-based solution will allow VAT to be collected from the overseas business selling the goods into the UK. Overseas businesses will charge VAT at the point of purchase and will be expected to register with an HM Revenue & Customs (HMRC) digital service and account for VAT due.
For goods worth more than £135 sent as parcels VAT will continue to be collected from UK recipients in line with current procedures for parcels from non-EU countries.
Exporting goods to the EU
UK businesses would need to plan for customs and VAT processes, which will be checked at the EU border. So they should check with the EU or relevant Member State the rules and processes which need to apply to their goods.
Exporting goods to EU businesses –VAT registered UK businesses will continue to be able to zero-rate sales of goods to EU businesses, but will not be required to complete EC sales lists. UK businesses exporting goods to EU businesses will need to retain evidence to prove that goods have left the UK, to support the zero-rating of the supply. The required evidence will be similar to that currently required for exports to non-EU countries with any differences to be communicated in due course.
Import VAT at the rate due on the Member State and customs duties will be due when the goods arrive into the EU. UK businesses nwoudl need to check the relevant import VAT rules in the EU Member State concerned.
Exporting goods to EU consumers -if the UK leaves the EU without an agreement, the VAT distance selling arrangements will no longer apply to UK businesses and UK businesses will be able to zero rate sales of goods to EU consumers.
Current EU rules would mean that EU member states will treat goods entering the EU from the UK in the same way as goods entering from other non-EU countries, with associated import VAT and customs duties becoming due when the goods arrive into the EU.
Supplying services into the EU from the UK
If the UK leaves the EU without an agreement, the main VAT ‘place of supply’ rules (which determine the country in which you need to charge and account for VAT) will continue to apply in broadly the same way that they do now, with areas of potential change flagged below.
Digital services to non-business customers – the ‘place of supply’ will continue to be where the customer resides. VAT on services will be due in the EU Member State within which your customer is a resident.
Insurance and financial services – if the UK leaves the EU without an agreement, input VAT deduction rules for financial services supplied to the EU may be changed.
Tour Operators -businesses that buy and sell on certain travel services that take place in the EU use the Tour Operators Margin Scheme. HMRC state that they will continue to work with businesses to minimise any impact.
VAT Mini One Stop Shop (MOSS)
MOSS is an online service that allows EU businesses that sell digital services to consumers in other EU member states to report and pay VAT via a single return and payment in their home Member State. Non-EU businesses can also use the system by registering in an EU Member State.
If the UK leaves the EU with no agreement, businesses will no longer be able to use the UK’s Mini One Stop Shop (MOSS) portal to report and pay VAT on sales of digital services to consumers in the EU.
Businesses that want to continue to use the MOSS system will need to register for the VAT MOSS non-Union scheme in an EU Member State. This can only be done after the date the UK leaves the EU. The non-union MOSS scheme requires businesses to register by the 10th day of the month following a sale. You will need to register by 10 April 2019 if you make a sale from the 29 to 31 March 2019, and by 10 May 2019 if you make a sale in April 2019.
Alternatively, a business can register for VAT locally in each EU Member State where sales are made.
EU VAT refund system
If the UK leaves the EU without an agreement, then UK businesses will continue to be able to claim refunds of VAT from EU member states but in future they will need to use the existing processes for non-EU businesses.
EU VAT Registration Number Validation – accessed via the EU Commission’s website
If the UK leaves the EU without an agreement, UK businesses will be able to continue to use the EU VAT number validation service to check the validity of EU business VAT registration numbers. UK VAT registration numbers will no longer be part of this service. HMRC is developing a service so that UK VAT numbers can continue to be validated.
Businesses in Northern Ireland importing and exporting to Ireland
There is no detail on trade between Northern Irleand and Ireland except that the paper states that in a no deal scenario, the UK would ‘stand ready to engage constructively to meet our commitments and act in the best interests of the people of Northern Ireland’.
On 7 November 2017 the Office of Tax Simplification (OTS) laid in Parliament and published its first report on VAT setting out a range of proposals for simplifying the tax. What was meant to be a simple tax has become highly complex and the OTS report says it has not kept pace with changes in society.
The report contains 23 recommendations for simplifying the tax. Its lead recommendation on the future level and design of the VAT threshold has prompted debate. By enabling many small businesses to stay out of the VAT system the high threshold is a form of simplification, but it costs the UK around £2bn per annum, and evidence suggests that many growing businesses are discouraged from expanding beyond this point. The report looks at options for reducing the current ‘cliff edge’ effect resulting in a ‘bunching’ of businesses just before the VAT threshold, and an equally large drop off in the number of businesses with turnovers just above the threshold.
The 8 core recommendations are:
- the government should examine the current approach to the level and design of the VAT registration threshold, with a view to setting out a future direction of travel for the threshold, including consideration of the potential benefits of a smoothing mechanism
- HMRC should maintain a programme for further improving the clarity of its guidance and its responsiveness to requests for rulings in areas of uncertainty
- HMRC should consider ways of reducing the uncertainty and administrative costs for business relating to potential penalties when inaccuracies are voluntarily disclosed
- HM Treasury and HMRC should undertake a comprehensive review of the reduced rate, zero-rate and exemption schedules, working with the support of the OTS
- The government should consider increasing the partial exemption de minimis limits in line with inflation, and explore alternative ways of removing the need for businesses incurring insignificant amounts of input tax to carry out partial exemption calculations
- HMRC should consider further ways to simplify partial exemption calculations and to improve the process of making and agreeing special method applications
- the government should consider whether capital goods scheme categories other than for land and property are needed, and review the land and property threshold
- HMRC should review the current requirements for record keeping and the audit trail for options to tax, and the extent to which this might be handled on-line.
At the end of last month the UK formally triggered Article 50 and the Government published a White Paper on the Repeal Bill, which has clarified how the UK will treat existing European Case law after the UK leaves the EU. This will impact on the future of VAT. Details of the repeal bill can be found here
Currently the European Communities Act 1972 (ECA) gives effect to EU treaties in UK law and provides for the supremacy of EU law. It also requires UK courts to follow the rulings of the Court of Justice of the European Union (CJEU). Some EU law applies directly without the need for UK implementing legislation, but other parts of EU law have to be implemented in the UK through via domestic legislation.
The intention is that the Repeal Bill will repeal the ECA. It will also convert EU law into UK law as it stands at the point of the UK’s exit from the EU. This will give some certainty to businesses and allow them to continue operating in the knowledge that rules will not change significantly and suddenly on the UK’s exit from the EU. It will then be down to Parliament or where appropriate, the devolved legislatures, to amend, repeal or change any piece of EU law (once it has been brought into UK law) once the UK is out of the EU.
The Bill creates powers to make secondary legislation to enable corrections to be made to laws that would otherwise no longer operate appropriately once the UK leaves the EU and will also enable changes to domestic law to reflect the content of any withdrawal agreement made under Article 50. It will also give the UK Government once we havelef the EU powers to change the scope and operation of domestic VAT .
Existing EU case law
Following the EU referendum, there had been significant speculation and varying views on how the UK would treat existing CJEU case law, and its impact on the UK tax legislation once the UK leaves the EU. The repeal bill clarifies that case law precedent from the CJEU will continue to apply (for a time at least) and that any uncertainties/disagreements over the meaning of UK law after the UK leaves the EC derived from EU cases will be decided by reference to the CJEU case law as it exists on the day the UK leaves. So the European Court of Justice will no longer have any jurisdiction in the UK, but its existing case law, up to the date of withdrawal, will continue to be binding on UK courts as they interpret EU law that has been converted into domestic law.
The bill is therefore likely to give CJEU case law similar precedent status to decisions of the UK Supreme Court and both HMRC and appellants may continue to rely on case law as they have up to this point. After exit UK legislation (including that relating to UK VAT) passed by Parliament will take precedence over preserved EU-derived law and thus UK VAT and tax law is likely to start to diverge from EU law gradually as UK case law develops. The Office of Tax Simplification is also currently considering changes to UK VAT that could be made once the UK exits the EU.
Some bills will be necessary to ensure the law continues to function properly from day one, and this includes a Customs bill to establish a framework to implement a UK Customs regime, because this cannot be met by incorporating EU law.
The likelihood is that a Customs border will come into existence early in 2019 with the potential to cause disruption to movement of goods coming in and out of the UK. It is hoped that the Government will publish proposals as soon as possible. The Customs Declaration Services (CDS) programme was intended to replace the existing system for handling import and export freight (CHIEF) from January 2019. Now that the Government has made a decision to leave the EU Customs Union, there is serious concern that this project will be in place on time.
There is still much uncertainty which can only be addressed when the terms of the UK’s departure from the EU are clearer.
In Budget 2016 the Government announced that it would introduce a new tax relief for museums and galleries to support them to develop new exhibitions and to display their collections to a wider audience. The draft legislation was published in clause 22 of the draft Finance Bill but due to the forthcoming election it was removed from the Bill. The Treasury has stated that the government will legislate for the changes at the earliest opportunity in the next Parliament. It will be for the new government to decide what to recommend to Parliament.
Information on the proposed relief is available on the Arts Council website here, with links to HMRC.
HMRC issued six Making Tax Digital consultations in August 2016 which outlined its plans to modernise the tax system. The main proposal under consultation was the need for over 5 million businesses with turnover over £10,000 and those receiving rental income from properties, to submit quarterly updates of their business activity to HMRC digitally. The requirement is to keep records digitally using a method that is compatible with the MTD programme. HMRC have stated that they will publish a list of providers who offer compatible services. HMRC initially stated that free software would be available for this but so far details have not ben announced.
On Monday 20 March 2017 the draft Finance Bill was published confirming plans to go ahead with quarterly direct tax reporting for unincorporated businesses (sole traders) and landlords with turnover over the VAT threshold (£85,000 from 2018/19 tax year) from April 2018. Initially this will affect sole traders, landlords and the self-employed.
Those who are below the VAT threshold will have to start mandatory quarterly reporting from April 2019. Partnerships with fee income above £10m will have a deferral to April 2020, aligning them with limited companies which also begin quarterly filing from April 2020.
All VAT registered businesses irrespective of turnover levels will have to report VAT through the new system from April 2019 as current arrangements will be superseded and any online or paper submissions outside the Making Tax Digital IT system will not be permissible. At Budget 2017, the Chancellor confirmed that businesses will be able to continue to use spreadsheets for record keeping (a concern for many VAT registered traders who are partly exempt) but their software must be able to interact with those spreadsheets so that the requirements of digital reporting are met.
The £10,000 turnover entry limit is not mentioned in the bill so it appears that this may still be up for debate as part of the ongoing HMRC consultations.
The MTD process for agents is still being refined by HMRC. At the moment it appears that agents will be required to register for Agents Services to allow them to act on behalf of their clients under MTD. To register for this they will need to request a new “clean” set of user credentials from the Government Gateway and carry out a mapping process in order for any existing 64-8 relationships to be carried over to these new set of credentials.
The Government has confirmed that it will introduce legislation to exempt charities from the Making Tax Digital requirements. It is important to note however, that charities are exempt only from these new reporting requirements and clarification is being requested from HRMC on the process for charities managing their existing ongoing tax reporting requirements,
However, the Government has decided that charity trading subsidiaries should be within the scope of the MTD obligations. The Charity Tax Group had called for trading subsidiaries to be included within the exemption as a charity will often use a subsidiary to make its activities tax effective or to accommodate any trading activities, often a requirement dictated by administrative, legal and financial practicalities. As the charity is responsible for the administration of the subsidiary, processes and staff resources are often shared across the organisation. Therefore, if a charity subsidiary was required to comply with these rules, it would mean that the charity would have to operate two systems (which adds complexity) or consider maintaining digital records for the whole charity group, undermining the proposed exemption. CTG has also questioned how this will work with a charities registered with a subsidiary in a VAT group.
MTD implementation timeline
April 2017 – public testing opens
April 2018 – businesses with turnover above VAT threshold £85k
April 2019 – expanded to cover VAT Reporting and self-employed small businesses with turnover above £10k
April 2020 – corporations and partnerships with turnover above £10m
The OTS has published the terms of reference for its review of VAT announced in Autumn Statement 2016, setting out areas which will fall within its scope.
Areas suggested for the simplification review include:
- VAT registration thresholds;
- complexities created by the definitions of types of supply currently exempted, reduced rated or zero-rated, and whether they need to be modernised;
- whether there is demand for having a more widely available formal rulings system, e.g. in relation to TOGCs;
- the potential for simplifying partial exemption methods, the option to tax and the Capital Goods Scheme;
- Special Accounting Schemes;
- general administration including the penalty regime and the appeals process; and
- opportunities to align VAT with other taxes (or vice versa) as part of Making Tax Digital.
The review will not be concerned with VAT rates or issues arising from Brexit, including the treatment of financial services, statistical reporting and EU cross-border VAT rules such as the MOSS. But the review will consider Brexit in looking at opportunities to simplify VAT
for the future.
The terms of refernce are on the www.gov.uk website.
Welcome to our latest VAT Newsletter. Please click on the links below to read the articles.
The Autumn Statement
This brought some unwlecome news on the Flat Rate Scheme for some small service businesses. Read more.
VAT case update
In a case of interest to charities, a Cathedral has sucessfully argue that in could claim VAT based on the ‘Sveda’ EU decision. Read more.
The Upper Tribunal has confirmed that the wholly owned subsidiary of a charity is not a non-profit making body and is not therefore entitled to exemption for its services. Read more.
HMRC have clarified their policy on VAT incurred prior to registration. Read more.
Contact us if you have any question on the above on 020 8492 1901
The following VAT meaures were announced in the Autumn Statement
VAT Flat Rate Scheme – The government will introduce a new 16.5% rate from 1 April 2017 for businesses with limited costs, such as many labour-only businesses to prevent perceived abuse of the scheme. Guidance in Notice 733 which has the force of law, published today, will introduce anti-forestalling provisions.
From 1 April 2017, FRS businesses will have to determine whether they meet the definition of a ‘limited cost trader’. A limited cost trader will be defined as one whose VAT inclusive expenditure on goods is either:
- less than 2% of their VAT inclusive turnover in a prescribed accounting period
- greater than 2% of their VAT inclusive turnover but less than £1000 per annum
if the prescribed accounting period is one year (if it is not one year, the figure is the relevant proportion of £1000).
Goods, for the purposes of this measure, must be used exclusively for the purpose of the business but exclude the following items:
- capital expenditure
- food or drink for consumption by the flat rate business or its employees
- vehicles, vehicle parts and fuel (except where the business is one that carries out transport services – for example a taxi business – and uses its own or a leased vehicle to carry out those services)
These exclusions are designed to prevent traders buying either low value everyday items or one-off purchases in order to inflate their costs beyond 2%.
Anti-forestalling provisions in the Flat Rate Scheme Notice 733 was provided on 23 November 2016 and is designed to prevent any business defined as a limited cost trader from continuing to use a lower flat rate beyond 1 April 2017. Draft secondary legislation will be published on 5 December 2016 and businesses will have 8 weeks to comment. HMRC will introduce an online tool that will help determine whether businesses should use the new rate.
Unfortunately as well as tackling the abuse, this measure will affect many legitimate small businesses who have low spend on goods, and mean that the benefits of the FRS will be reduced.
Tackling exploitation of the VAT relief on adapted cars for wheelchair users – The government will clarify the application of the VAT zero-rating for adapted motor vehicles to prevent stop abuse of this legislation, while continuing to provide help for disabled wheelchair users.
VAT grouping – the government is to consult on the provisions relating to VAT grouping.
Retail Export Scheme – the government is to provide funding with a view to digitising the scheme fully the to reduce the administrative burden to travellers.
Tax simplification –the government has asked the Office of Tax Simplifcatrion to carry out reviews on aspects of the VAT system.
Other measures already announced
Strengthening tax avoidance sanctions and deterrents – as signalled at Budget 2016 the government will introduce a new penalty for any person who has’ enabled’ another person or business to use a tax avoidance arrangement that is later defeated by HMRC. This new regime will reflect an extensive consultation and input from stakeholders and details will be published in draft legislation shortly. The government will also remove the defence of having relied on non-independent advice as taking ‘reasonable care’ when considering penalties for any person or business that uses such arrangements.
Implementation of the Fulfilment House Due Diligence Scheme – as announced at Budget 2016, the government will legislate in Finance Bill 2017 to introduce a new Fulfilment House Due Diligence Scheme in 2018. This will ensure that fulfilment houses are required to assist in prevention of VAT abuse by some overseas businesses selling goods via online marketplaces. The scheme will open for registration in April 2018.
Updating the VAT Avoidance Disclosure Regime – as announced at Budget 2016 and following consultation, legislation will be introduced in Finance Bill 2017 to strengthen the regime for disclosure of avoidance of indirect tax including VAT. Provision will be made to make scheme promoters primarily responsible for disclosing schemes to HMRC and the scope of the regime will be extended to include all indirect taxes. This will have effect from 1 September 2017.
Penalty for participating in VAT fraud – as announced at Budget 2016 and following consultation, the government will legislate in Finance Bill 2017 to introduce a new and more effective penalty for participating in VAT fraud. It will be applied to businesses and company officers when they knew or should have known that their transactions were connected with VAT fraud. The penalty will improve the application of penalties to those facilitating orchestrated VAT fraud. The new penalty will be a fixed rate penalty of 30% for participants in VAT fraud. This will be implemented following Royal Assent of the Finance Bill 2017.
Welcome to the October issue of our VAT Newsletter.
Upper Tribunal rules market pitches are taxable
The Upper Tribunal has overturned the decision of the First tribunal and decided that the sale of spaces at craft fairs is taxable at the standard rate. Kati Zombory-Moldovan t/a Craft Carnival organised craft and garden fairs. Spaces were sold to businesses and individuals involved in various crafts to enable them to sell their products at a fair to which the general public were admitted on payment of an entrance charge. The taxpayer accounted for VAT on the admission fees paid by the public but not on the supply of spaces to stallholders which she treated as an exempt supply of land. HMRC considered that the supplies to stallholders were not capable of falling within the land exemption, and should be treated as a composite supply of taxable services comprising the organisation of a craft fair, the purpose of which was to provide the stallholders with an opportunity to trade.
The taxpayer contended that only the right to use an allocated space was supplied to the stallholder and, as this met the EU law criteria of “leasing or letting of immoveable property”, it was an exempt supply. The starting point is that a supply of land is exempt from VAT. But there are many exceptions in the VAT legislation – for example, charges for hotel accommodation and car parking are standard rated. In some cases, supplies are subject to VAT because the customer is deemed to be getting more than just a supply of land in return for his payment.
HMRC contended that there were services provided that went beyond the right to use the particular space. The taxpayer further submitted that if that was the case the stall itself remained exempt either because there was a single supply of the stall which predominated, to which the other elements were ancillary, or because there were a number of essential elements making a composite whole, the essential feature of which was the right to use land.
The Upper Tribunal has held that it would be artificial to attempt to split what was provided to a stallholder into more than one supply. Regarding whether the single supply was exempt, the Upper Tribunal drew a distinction between informal car boot sales where buyers and sellers turn up on the day without booking in advance, and the kind of fairs that the taxpayer organises.
The UTT considered that the taxpayer was going beyond the relatively passive function of granting an exempt interest over land. It was providing the stallholder with a licence, not only for the use of a plot of land for a particular period, but for the use of a stall or pitch “at the event specified”. Based on a review of the contractual arrangements, the UTT concluded that the taxpayer traded on its reputation as a long-standing organiser of successful trade shows and had significant responsibilities beyond the bare provision of an appropriately-sized plot. The UTT therefore considered that the taxpayer’s supplies to stallholders did not fall within the land exemption.
Why it matters: This case illustrates the difficulties in deciding whether granting a right to use space is taxable or exempt. This decision might appear to go against HMRC’s own advice in VAT Notice 742, para 2.6. which says the exemption for the supply of land is available for “granting traders a pitch in a market or at a car boot sale.” The key point in both the Craft Carnival and International Antiques cases is that HMRC argued the fair organiser was supplying a lot more than a pitch to exhibitors and therefore paragraph 2.6 was not relevant. Businesses making supplies to stallholders at exhibitions and events may wish to review the VAT treatment of their charges to stallholders following this latest decision. Cases such as this and International Antiques and Collectors Fairs Ltd indicate that, as far as trade fairs are concerned, the dividing line between exempt supplies of land and taxable supplies of exhibition services has to be determined by how much the supplier’s activity goes beyond merely providing the space for the exhibitor to display. In both cases, the tribunals have emphasised the fact that the taxpayers held themselves out as experienced organisers of successful trading events, and this emphasis on the organisational aspects of their activities was sufficient to take them beyond the passive activity of granting someone exclusive permission to occupy a specified area for a specified time.
Members of VAT groups – which entity is entitled to make a claim for overpaid VAT?
The Upper Tribunal (UTT) has released its decision in the joined cases of Lloyds Banking Group plc, Standard Chartered PLC, MG Rover Group Ltd and BMW (UK) Holdings Limited. The cases at the First Tier Tribunal (FTT) level had resulted in diametrically opposite judgments. In MG Rover the FTT had held that it was the generating taxpayer who was entitled to make the claim. By contrast the Standard Chartered FTT held that it was the representative member of the VAT group which was so entitled. The UTT has held that the right to make a VAT repayment claim belongs to the representative member of the VAT group even after the ‘real world supplier’ leaves the VAT group , and any resolution of how the members of a group deal with that repayment is a private law matter.
Why it matters: Since the litigation concerning repayment of overpeaid VAT was settled in the Fleming case, many taxpayers have made claims, which have been complicated by disputes over which entity was entitled to the repayment. This is a complex area and taxpayers may wish to review the position following the Upper Tribunal decision, particularly as other litigation on this topic is ongoing.
HMRC can deregister UK VAT representatives of non-EU businesses
HMRC can require a non-EU established taxpayer to appoint a UK established VAT representative who is jointly and severally liable for the taxpayer’s obligations and liabilities under that Act. With effect from 7 November 2016, HMRC will be able to refuse to register a person as a VAT representative and cancel the existing registration of a VAT representative if they are satisfied that the representative is not a fit and proper person to act in that capacity.