VAT at 50!

On 1 April 2023, VAT will be 50 years old. It was first introduced to the UK on 1 April 1973 – being famously described as a ‘simple tax’ – and has become steadily more important with the passing of time: the standard rate of 8% back in the 1970s increased to 15% under the Thatcher government in the 1980s; to 17.5% in the 1990s; and finally to 20% in 2011 under the Coalition government. 

VAT raises £143 billion for the Exchequer each year and continues to be one of the most important taxes in the UK, (despite Brexit). Complex topics such as partial exemption, HMRC powers of assessment, and land and property must be given priority to ensure that returns are correct. VAT is unlikely to be abolished for a long time and has certainly not lived up to its ‘simple’ promise as rules become ever more complex and case law continues to expand. What for the next 50 years?