The VAT Compliance Burden in the UK: A Comparative Assessment

(2020) British Tax Review 354-377

25 Pages Posted: 13 Oct 2020

See all articles by Yige Zu

Yige Zu

Durham University

Chris Evans

University of New South Wales

Richard Krever

University of Western Australia Law School

Date Written: August 22, 2020

Abstract

This article explores the compliance burden imposed by the value added tax (VAT), which has traditionally been recognised as one of the more onerous taxes so far as compliance by business taxpayers is concerned. It compares the UK’s VAT compliance burden with that experienced elsewhere in the EU, together with the experience of other Organisation for Economic Co-operation and Development and Forum on Tax Administration countries. Based upon the outcomes of a large-scale research project conducted in 2018–19 using an experimental diagnostic tool, the UK appears to have mixed results, comparing poorly in relation to certain factors but outperforming many of its European and global counterparts in relation to other aspects of its VAT regime. The results are of particular interest to UK policy makers and practitioners as they establish that the most significant sources of compliance burden lie in the design of the underlying VAT law rather than in its administration. The UK’s withdrawal from the EU may offer a once in a generation opportunity to effect real change and make meaningful reductions to the business compliance burden which could provide lasting improvements to the internationally competitive position of UK businesses. The importance of addressing the current causes of the compliance burden becomes all the more pressing in the face of pending new costs UK businesses will face post-Brexit. The freedom created by Brexit in terms of VAT design should be exploited to achieve compliance burden reductions needed to offset new costs likely to arise in the post-Brexit era.

Note: “This material was first published by Thomson Reuters, trading as Sweet & Maxwell, 5 Canada Square, Canary Wharf, London, E14 5AQ, in the British Tax Review as The VAT Compliance Burden in the UK: A Comparative Assessmen [2020] BTR, No.3 and is reproduced by agreement with the publishers”."

Keywords: Brexit; Comparative law; Compliance costs; OECD; VAT

JEL Classification: K34

Suggested Citation

Zu, Yige and Evans, Christopher Charles and Krever, Richard, The VAT Compliance Burden in the UK: A Comparative Assessment (August 22, 2020). (2020) British Tax Review 354-377, Available at SSRN: https://ssrn.com/abstract=3679240

Yige Zu (Contact Author)

Durham University

Palatine Centre
Stockton Rd
Durham, Durham DH1 3LE
United Kingdom

HOME PAGE: http://www.dur.ac.uk/directory/profile/?id=18505

Christopher Charles Evans

University of New South Wales ( email )

School of Taxation and Business Law
Australian School of Business, UNSW
Sydney, NSW 2052
Australia

Richard Krever

University of Western Australia Law School ( email )

M253
35 Stirling Highway
Crawley, Western Australia 6009
Australia

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