Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Split payment for online sales

27 March 2018
Issue: 4641 / Categories: News

Consultation on split payment system to combat abuse.

The government is consulting on how a split payment system could be used to combat online VAT fraud. This would use payments industry technology to collect VAT on online sales and transfer it directly to HMRC.

The government considers that the merchant acquirer is likely to best placed to effect the split of VAT from the gross payment. Card issuers or banks would act as safeguards if for example the merchant acquirer is outside the UK and does not meet the criteria for effecting the split or does not make the split.

The process would entail HMRC creating a list of acquirers and payment service providers that card issuers would check for each transaction before releasing the full payment. The acquirer would then split the VAT from the payment and remit it to HMRC. The Revenue would credit the merchant’s VAT account with the amount received...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon