13 Mar 2018
Chancellor Philip Hammond’s Spring Statement on Tuesday addressed the usual topics of housing, the cost of living and business rates, and also mentioned measures to address financial crime pertaining to tax and money laundering.
Of interest was tax compliance, he said the government will look into a new VAT collection system and seek to improve its VAT compliance systems , as it looks to increase its tax revenue streams to boost public spending.
The issue of VAT fraud and its impact is a key concern for the UK and European Union, which estimates that billions are lost to the crime annually.
Hammond has previously discussed tightening loopholes that facilitate VAT fraud by businesses.
“We will consult on a new VAT collection mechanism for online sales to ensure that the VAT consumers pay actually reaches the Treasury,” he said.
He also explained that the government has published a call for evidence on how online platforms can help their users to pay the right amount of tax.
Another area of interest was developments around cash payments and the financial crime link.
The Chancellor explained that the government is looking to encourage the use of digital payments while ‘ensuring that those who still need to pay with cash are able to.’
He added that the state also seeks to crackdown on the use of cash to evade tax and launder money, and he made reference to the Treasury department’s call for evidence on cash payments in the new economy.
According to the United Kingdom’s 2017 National Risk Assessment (NRA), cash-based money laundering poses a high risk to the economy.
The NRA highlighted an increase in the movement of illicit cash through the non-bank financial system and said cash-intensive businesses like nail bars, takeaways and scrap metal dealers present ‘attractive opportunities for criminals.’
– Irene Madongo
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