- HMRC will contact businesses identified as non-established taxable persons (NETPs) for VAT purposes and give them 30 days to challenge the decision.
- Starting from late January 2024, HMRC will send letters to businesses it believes are NETPs for UK VAT purposes, particularly those using agents or serviced office addresses.
- The letter, first mentioned in Agent Update 112, asks businesses to prove their establishment in the UK for VAT purposes if they disagree with being classified as NETPs.
- HMRC specifies the criteria for being established in the UK for VAT purposes and emphasizes that UK incorporation alone does not guarantee establishment.
- The letters are mainly targeted at businesses trading on online marketplaces.
- Disagreeing businesses must submit evidence within 30 days, and agents receiving the letters on behalf of their clients should promptly consult with them.
- The letter also outlines the process for requesting a review of HMRC’s decision or appealing to an independent tribunal.
Source ICAEW
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