On 21 October 2016, the government published regulations, amending regulation 10 of the Value Added Tax Regulations 1995 (SI 1995/2518), to allow HMRC to refuse or cancel a VAT representative’s registration if HMRC is satisfied that the representative is not (or is no longer) “a fit and proper person to act in that capacity”.
On 7 November 2016, HMRC published guidance setting out criteria for determining whether an individual is a fit and proper person to act as a VAT representative of a non-established taxable person. In summary, the guidance provides that a person is not a fit and proper person if:
• the person has been disqualified as a director or has had previous requests for a similar role in VAT or other regime revoked or refused
• the person is, or has been, involved in crime, has criminal convictions or has incurred penalties for deliberate wrongdoing
• the person is connected with the relevant business or key persons involved in that business, or with any non-compliant or fraudulent business.
This measure follows the government’s announcement in the Budget of an intention to tackle VAT evasion on online sales by overseas businesses. The amendment, however, is not expressly limited to VAT evasion through online sales.
The new regulations came into force on 7 November 2016.
A copy of the Regulations is available to view here.