This week's opinion

It was difficult to raise much enthusiasm to read HMRC’s consultative document with the less than gripping title VAT: Tackling fraud on goods sold online – update on split payment but I did go back to it a few days ago. It was worthwhile doing so because it points to some HMRC thinking which taken to its logical consequence would have a profound effect on the way VAT works. The document considers the problem of VAT which customers pay on online transactions but that never gets paid over to HMRC (see ‘Split payment model for online sales’ below).

What interest me is the wider implications of this. Could we ever get to a system where VAT is paid over and recovered in real time to HMRC on all transactions through a massive data base that records all VATable transactions in the UK in...