Tag Archives: HMRC-published-guidance

Extension of VAT energy-saving materials relief

By   22 January 2024
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HMRC have published a new Policy Paper on the extension of energy-saving materials (ESMs).

Installations of ESMs in residential accommodation currently benefit from a temporary VAT zero rate until 31 March 2027, after which they revert to the reduced rate of VAT at 5%.

This measure extends the relief to installations of ESMs in buildings used solely for relevant charitable purposes, such as village halls or similar recreational facilities for a local community.

It also expands the scope of the relief to the following technologies:

  • electrical batteries that store electricity generated by certain ESMs and from the National Grid
  • water-source heat pumps
  • diverters that enable excess electricity from certain ESMs to be used within a building in which it is generated rather than exported to the grid

It also adds certain preparatory groundworks that are necessary for the installation of ground- and water-source heat pumps.

The changes apply from 1 February 2024

The policy objective is to incentivise the installation of ESMs across the UK to improve energy efficiency and reduce carbon emissions.

The measures are implemented by The Value Added Tax (Installation of Energy-Saving Materials) Order 2024.

VAT: Where’s my reply?!

By   21 July 2022
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HMRC has launched a new service dashboard which aims to let taxpayers who have written to HMRC know when to expect a reply.

This sounds like a significant development and a very helpful tool for taxpayers and advisers alike. However…

it only covers applications for registration, deregistration and group registration – and only those made by post.

Any other checks are met with a screen stating “You need to use another service to get an update”.

So, a small step in the right direction.

VAT: How to avoid MTD penalties

By   15 June 2022
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HMRC has published a new Factsheet CC/FS69 which sets out compliance checks to be made to avoid penalties for Making Tax Digital (MTD).

Under MTD, VAT-registered businesses must keep certain records digitally and file their VAT returns using compatible software.

The Factsheet covers:

  • signing up to MTD – go to www.gov.uk and search for ‘VAT record keeping’. A business must have functional compatible software in place before you signing up
  • filing VAT return using functional compatible software. This needs to be able to record and store digital records, provide HMRC with information and VAT returns from the data held in those digital records, and receive information from HMRC
  • keep records digitally in an “electronic account” (all transactions must be contained in an electronic account but there is no need to scan paper records like invoices and receipts)
  • use digital links to transfer or exchange data
  • use the checking functions within the software (to ensure returns are correct before being filed)

Penalties

HMRC levy penalties for MTD for the following actions:

  • filing returns not using use functional compatible software. A penalty applies for every return filed in error
  • not keeping records digitally, a penalty applies for every day on which a business does not meet this requirement
  • not using digital links to transfer data between pieces of software, a penalty applies for every day on which a business does not meet this requirement
  • not signing up to MTD

These penalties apply in addition to existing penalties and interest charged for a range of misdemeanours from late returns to deliberate underdeclarations.

VAT: HMRC Toolkits updated

By   4 June 2020
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HMRC has updated the following online toolkits for June 2020:

Input tax

Output tax and

Partial exemption

The Toolkits

These toolkits can be a useful resource. Although designed for agents and advisers, they can equally be of assistance to businesses when completing VAT returns. The contents are based on HMRC’s view of how tax law should be applied, so they should not be used as a substitute for proper professional advice. These toolkits set out areas of risk, provide general checklists, details of record keeping and links to HMRC information.  Many find that these toolkits are more user friendly than “traditional” HMRC guidance and they address many contentious areas.

Overview

For a helpful general guide to input tax and checklist please see here. And an introduction to partial exemption here.