Get in touch
Accountants & Business Advisors

VAT and the Sharing Economy: Call for Evidence - GOV.UK

10 December 2020


Share this article

Rishi Sunak announced Yesterday a consultation on the VAT rules in the Sharing Economy. Deadline for evidence is 3 March 2021.

Strong impression that increased receipts of VAT will be needed to help reduce the government deficit caused by the COVID pandemic.

Document observes that the VAT base is being eroded because there are many more businesses trading below the VAT registration annual threshold of £ 85,000. The relationship of traders above and below the VAT threshold is likely to continue to change, moving more sales out of the scope of VAT.

Mention is made of short term accommodation providers, without naming Airbnb and passenger transport without naming Uber.  Possible solutions could potentially include a much lower overall VAT registration threshold, similar to perhaps in several EU member states around £30-40,000 per year.  Alternatively a lower threshold could apply to particular sectors only.

Also the document refers to overseas providers of b2b services to UK businesses who are not VAT registered, when neither the seller or the buyer accounts for VAT