VAT and the sharing economy

AAT believes that the sharing economy offers a range of employment and consumer benefits that can benefit the British economy in a range of ways. However, AAT also has a number of concerns about the tax treatment of the sharing economy.

We campaigned for online platforms to become liable for the collection and remittance of VAT and so welcomed this new requirement that came into effect in January 2021. However, the failure to take action against historic VAT evaders in this area and the poor enforcement/loopholes that have become obvious in recent months are disappointing.

In response to concerns about the distinction between VAT registered and non VAT registered businesses, AAT recommends HM Treasury give serious consideration to reducing the VAT threshold to £0 or to matching the personal allowance, as supported by 37.5% of AAT members in a recent survey.

AAT urges HM Treasury to engage with the likes of RAVAS and VATfraud.org on challenging issues in relation to cross-border VAT rules given their long history of successfully identifying problems in this area and proposing effective, practical solutions.