VAT Agenda

Tribunal – exempt tuition for sole practitioners and partnerships

On 11 October 2013 The Court of Appeal refused to allow a golf tutoring Appeal to go ahead on the basis that it would have no chance of success.

This case is very relevant to partnerships that currently provide exempt tuition. In fact it could mean that they will have to register for VAT purposes as soon as possible. It is our view that the trader should at the very least write to HMRC to enquire regarding the situation.

HMRC Changes Its Policy On Hotel Rooms Supplied For Catering Purposes

With effect from 22 January 2013 hotel businesses need to be aware that HMRC have changed their policy on the charging of VAT on rooms provided for the provision of catering facilities. Revenue and Customs Brief 02/13 announces that HMRC now considers that the supply of hotel rooms is a standard rated supply even where the catering is provided by a third party.

No VAT Registration Threshold For Non-UK Businesses Trading In The UK From 1st December 2012

Just a note to remind you that from 1st December 2012 following a recent European Court Judgment, non-established taxable persons (NETPs) will no longer be able to benefit from the UK VAT registration threshold (GBP 77,000). They will be required to register for UK VAT when they make their first supply of goods and services here in the UK regardless of value. Read more on No VAT Registration Threshold For Non-UK Businesses Trading In The UK From 1st December 2012

Recovery of Input Tax – ‘Right Tax Right Time’

HM Revenue and Customs recently issued an amended version of Notice 700 and have specifically noticed changes to the guidance on the timing of the recovery of input tax that came as somewhat of a surprise.

It say that if the VAT invoice is dated and available in the VAT accounting period covered by the tax point, it must be claimed in that period.

Latest round of Compliance Task Forces announced by HMRC

HM Revenue and Customs have just announced the latest targets of its trade and region specific taskforce campaign.

In May 2011, HMRC said it would be setting up taskforces specifically to look at the affairs of specific trades in specific regions of the UK. First to be targeted was as usual the restaurant trade. Since then HMRC have investigated trades such as scrap metal dealers, fast food outlets and landlords across London and the South.

Road Fuel Scale Charges (RFSC)

In Revenue & Customs Brief 11/12, HMRC has invited comments on a number of planned changes to the RFSC regime for accounting for VAT on fuel funded by businesses but used for private mileage.

The most significant change is acceptance by HMRC that, where a business has made charges for private mileage but these were below the RFSC rates; the business was only required to
account for VAT on the amounts charged, and not required to apply the RFSC.

The Budget March 2012

The VAT rates remain unchanged at…

Lower rate: 0%
Reduced rate: 5%
Standard rate: 20%

The registration and deregistration limits from 1 April 2012

HMRC announce the new Contractual Disclosure Facility

Your sole proprietor and partnership clients might be interested in Customs announcement of the new CDF facility. The new facility became available on 31 January 2012 and all cases of suspected fraud will be treated under these new procedures.

Authenticated Receipts

Authenticated receipts, rather than VAT invoices, are often used in construction contracts. HMRC currently accept that the employer can recover the VAT as soon as it has paid the contractor, without waiting for the authenticated receipt.

VAT and Construction Contracts

HMRC have released some revised guidance in draft, giving advance warning of some policy changes. In particular, these affect ‘design and build’ contracts and authenticated receipts.