Lots Of Businesses Are Being Contacted About Acquisition Tax, But What Is Acquisition Tax?
The purchase of goods from another EU member state is referred to as an acquisition, whereas the purchase of goods from outside of the EU is referred to an import. When goods are acquired from another member state, in certain circumstances VAT or tax are due on that acquisition, which is known as acquisition tax.
All UK businesses are required to inform HMRC about any goods brought into the UK, and ensure that any duty and VAT due is paid by the business. A UK business may also be required to pay VAT on goods purchased in other EU member state, goods which do not enter the UK however, and this can often cause some confusion especially when businesses are approached by the UK authorities.
Goods and services bought and sold between different EU member states can be ‘zero rated’ in certain circumstances when it comes to VAT. However, in order to apply this mechanism to your business, your business accounts need to reflect the transactions in the correct way. If this is not done, you may find that HMRC approach your business for acquisition tax. Whether HMRC are able to pursue your business or not will depend upon the type of transactions involved and the requirements in the country that your business has been trading in.
VAT is always a complicated issue, and acquisition tax is no different. Here at Altion Law we are experts at advising and dealing with both VAT and acquisition tax, and our advisors are able to provide you with the clear and easy to understand advice that you need in order to make the best decision for your business.
If you have received a letter from HMRC relating to acquisition tax or are concerned that your business may incorrectly have submitted documentation to HMRC, please call our team for a confidential discussion about how Altion Law could assist you.
Altion Law are specialists at advising and representing parties who have received HMRC assessments and wrongdoing penalties from HMRC. If you would like to have a confidential discussion with a member of our team, please either complete an Online Enquiry or call us on 01908 414990 and we will be pleased to help you.
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