HM Treasury has issued an Explanatory Memorandum in response to proposals published by the European Union (EU) to reform certain VAT rules for the digital age. These proposals were published by the EU in December 2022 and whilst they are still just proposals at this stage, the UK government is responding to them largely because of the status of Northern Ireland and the fact for VAT purposes it is still considered part of the EU insofar as many provisions which relate to VAT and the movement of goods are concerned (as well as being still very much part of the UK VAT system of course). Should the proposed the changes be implemented, this would mean amendments to the EU VAT Directive and other supplemental legislation which would impact Northern Ireland. They may also impact UK businesses who are VAT registered in the EU as a result of their overseas business activities.
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