HMRC has published a tool to enable taxpayers to calculate the date by which VAT payments are due. It covers payments by:
Simple, but it works.
Latest from the courts
Following the Supreme Court decisions in Life Services Ltd and The Learning Centre (Romford) Ltd HMRC have published guidance in Revenue & Customs Brief 9 (2021).
NB: This guidance applies to bodies in England and Wales only – Scotland and Northern Ireland have different rules.
The relevant cases concerned the VAT liability of day-care services provided by private bodies to vulnerable adults in England. They confirmed that HMRC’s interpretation of the legislation is correct; that providers of day-care must be charities, public bodies or regulated by the relevant authority (“approved, licensed, registered or exempted from registration by any Minister or other authority pursuant to a provision of a public general Act”) in order to be able to exempt these services.
The legislation is: The VAT Act 1994, Schedule 9, group 7, item 9.
It is understood that there were a significant number of claims stood behind the Supreme Court cases and these will now fail.
HMRC state that providers who have not accounted for VAT on supply of these services must do so with immediate effect.
Commentary
This is a further example of the VAT complexity in the provision of health and welfare services. It has always been an area ripe for disputes and such bodies and their advisers would be prudent to review the tax treatment of their supplies. There are usually two discrete areas of potential problems; whether services are business or non-business, and if business – do they fall within the various exemptions found at Schedule 9, group 7, items 1 to 11.
This month the government have issued new guidance: The Border with the European Union Importing and Exporting Goods on the Border Operating Model. This provides comprehensive guidance on the movement of goods from 1 January 2021 and adds to previous guidance.
This is important information for any business moving goods between GB, the EU and NI and needs to be considered for tax planning and general preparation for Brexit. These rules will likely come into force regardless of whether the UK has negotiated an agreement with the EU.
The introduction comes in three stages:
Stage One
Business will need to:
Stage Two
If businesses are importing Products of Animal Origin (POAO) or a regulated plant and plant product; they will need to:
Stage Three
Businesses must:
General
From 1 January 2021
Businesses will need to review their processes for dealing with cross-border goods, both between the EU and Northern Ireland. This includes; customs declarations, compliance, provision of data, obtaining a duty deferment account and GB/EU EORI numbers as necessary. We also advise liaising with suppliers and customers to ensure, as far as possible, that transactions are as seamless as possible in these challenging times.
The new domestic reverse charge for building and construction services will be introduced on 1 October 2019. Details here
HMRC have now published comprehensive guidance which appears to cover all scenarios (but almost certainly there will be transactions which will produce disputes).
Brief Overview
The domestic reverse charge is a major change to the way VAT is collected in the building and construction industry.
It means the customer receiving the service will have to pay VAT to HMRC instead of paying the supplier.
It will only apply to individuals or businesses registered for VAT in the UK.
This will affect a business if it supplies specified services reported under the Construction Industry Scheme (CIS). A business will need to prepare for the change by:
The reverse charge does not apply if the service is zero rated or if the customer is not registered for VAT in the UK. It also does not apply to services which are supplied to end users or intermediaries connected with end users. More details here.
Please contact us if you have any queries.
What needs to be disclosed, and by whom?
The Disclosure of Avoidance Schemes (VAT & Other Indirect Taxes) rules came into effect this month. HMRC Notice 799 sets out the new disclosure rules which are wider than the previous rules and now apply to all indirect taxes (ie; Insurance Premium Tax, General betting Duty, Pool Betting Duty, Remote Gaming Duty, Machine Games Duty, Gaming Duty, Lottery Duty, Bingo Duty, Air Passenger Duty, Hydrocarbon Oils Duty, Tobacco Products Duty, Duties on Spirits, Beer, Wine, Made-Wine and Cider, Soft Drinks Industry Levy, Aggregates Levy, Landfill Tax, Climate Change Levy and Customs Duties) – not just VAT.
The Notice contains information on what to do if a person promotes or uses arrangements (including any scheme, transaction or series of transactions) from 1 January 2018 that will, or are intended to, provide the user with a VAT or other indirect tax advantage when compared to adopting a different course of action.
The information includes:
It is crucially important to establish who is required to notify HMRC and of what. The rules do not just cover tax advisers but may also affect businesses directly.
The effect of disclosure
A disclosure under the new rules has no effect on the tax position of any person who uses the arrangements. However, a disclosed arrangement may be challenged by HMRC or may be rendered ineffective by legislative action by Parliament.
Please contact us if you think any of the above affects you.