Annex F
IMPROVEMENTS TO THE IT INFRASTRUCTURE FOR
EXCHANGING INFORMATION WITH EUROPEAN PARTNERS
The Committee asked:
Have you had any success in your aim, stated in
your evidence, to bring forward the timetable for improvements
to the IT infrastructure used to exchange information ahead of
the Commission's planned timetable of 2009-11?
and, related to this point, you indicated that
the Committee was interested in any investment in HMRC's internal
IT systems for information exchange, and monitoring trades in
"real time".
The UK has played an active role in taking forward
work to improve the IT infrastructure used to exchange information
between Member States. We were pleased therefore that the ECOFIN
Council agreed in November on the need for a more rapid exchange
of VAT information. I can confirm that the Council has invited
the Commission to prepare a strategy and to publish an action
plan for taking forward this important work, and we are currently
awaiting proposals from the Commission on how they intend to take
forward discussions on this issue. In parallel, a small project
group, involving the Commission and Member States, has been established
to look at practical ways of improving the overall functioning
and efficiency of the VAT information exchange system. The UK
is playing an active role in that group.
It is true to say that some interest has been
shown in real time reporting systems on a transaction by transaction
basis, indeed this has been put forward as a feature of a wide
reverse charge. Understandably businesses are concerned at the
administrative cost of such an approach, which could be in the
region of £1.3 billion. However, the problem is not with
the basic system (which records details of VAT registered taxpayers,
together with their intra-EC supplies and acquisitions) but rather
with the speed with which the VAT data is collated and exchanged.
We believe that this can be significantly improved
without imposing undue burdens on business, in such a way as to
be a valuable tool to tax administrations in the fight against
VAT MTIC fraud. In the interim HMRC is actively reviewing how
it can further improve the efficiency and effectiveness of its
IT systems and the quality of the information held in its databases.
For example HMRC is actively promoting electronic direct trader
input of data and considering the extent to which that data can
be automatically validated at the time of entry.
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