Finance (No. 2) Act 2017

62 Digital reporting and record-keeping for VAT

(1) Schedule 11 to VATA 1994 (administration, collection and enforcement) is amended as set out in subsections (2) to (4).

(2) In paragraph 2 (accounting and payment)—

(a) in sub-paragraph (1) for “and the making of returns” substitute “, the making of returns and the submission of information”;

(b) after sub-paragraph (11) insert—

“(11A) Regulations under this paragraph may include incidental, supplemental, consequential, saving, transitional or transitory provision.”

(3) In paragraph 6 (duty of taxable person to keep records)—

(a) omit sub-paragraph (4);

(b) at the end insert—

“(5) The Commissioners may by regulations make provision about the form in which, and means by which, records are to be kept and preserved.

(6) Regulations under sub-paragraph (5) may—

(a) make different provision for different cases;

(b) provide for any provision of the regulations to be subject to conditions or exceptions specified in writing by the Commissioners;

(c) include incidental, supplemental, consequential, saving, transitional or transitory provision.

(7) If regulations under sub-paragraph (5) make provision requiring records to be kept or preserved in electronic form they must make provision for a taxable person to be exempt from those requirements for any month (“the current month”) if—

(a) the value of the person’s taxable supplies, in the period of one year ending with the month before the current month, was less than the VAT threshold, and

(b) the person was not subject to those requirements in the month before the current month.

(8) The regulations may modify the exemption for cases where a business or part of a business carried on by a taxable person is transferred to another person as a going concern.

(9) The “VAT threshold” means the amount specified in paragraph 1(1)(a) of Schedule 1 on the first day of the current month.

(10) Regulations under sub-paragraph (5) requiring records to be kept or preserved in electronic form may (among other things) make provision—

(a) as to the electronic form in which records are to be kept or preserved,

(b) for the production of the contents of records kept or preserved in accordance with the regulations,

(c) as to conditions that must be complied with in connection with the keeping or preservation of electronic records,

(d) for treating records as not having been kept or preserved unless conditions are complied with,

(e) for authenticating records,

(f) about the manner of proving for any purpose the contents of any records (including provision for the application of conclusive or other presumptions).

(11) Regulations under sub-paragraph (5) requiring records to be kept or preserved in electronic form may—

(a) allow any authorisation or requirement for which the regulations may provide to be given by means of a specific or general direction given by the Commissioners,

(b) provide that the conditions of an authorisation or requirement are to be taken to be satisfied only where the Commissioners are satisfied as to specified matters.”

(4) In paragraph 6A (power to direct keeping of records), for sub-paragraph (7) substitute—

“(7) Regulations under paragraph 6(5) apply for the purposes of this paragraph as they apply for the purposes of paragraph 6.”

(5) In section 83(1) of VATA 1994 (appealable decisions), for paragraph (zc) substitute—

“(zc) a decision of the Commissioners about the application of any provision of regulations under paragraph 2 or 6 of Schedule 11, or of regulations under section 135 or 136 of the Finance Act 2002 relating to VAT, which—

(i) requires returns to be made or information to be submitted by electronic communications, or

(ii) requires records to be kept or preserved in electronic form,

(including in particular a decision as to whether such a requirement applies and a decision to impose a penalty).”

(6) Subsections (3)(a) and (4) of this section come into force when the first regulations under paragraph 6(5) of Schedule 11 to VATA 1994 come into force.

(7) Regulations under paragraph 6(5) of Schedule 11 to VATA 1994 may not make provision requiring records to be kept or preserved in electronic form which has effect before 1 April 2019.