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HMRC internal manual

VAT Accounting Manual

Using the discretion to direct stagger - addressing stagger manipulation and suspected MTIC fraud cases: legislation

Regulation 25, VAT Regulations 1995 provides that a taxable person must account for and pay VAT by reference to specified periods.

Regulation 25(1) sets out the basic requirement that every registered business must make a return in respect of every quarterly period. However, that regulation also provides discretion to allow or direct a business to submit returns for periods other than quarterly. Specifically, regulations provide powers as follows:

  • Regulation 25(1)(a) contains a power to allow or direct monthly returns.
  • Regulation 25(1)(c) contains a power to direct returns for specified dates.

This discretionary power may be used to combat stagger manipulation or to combat and disrupt MTIC fraud. The use of the discretion is delegated on the basis described in this guidance.