articles: VAT

What will be in the Budget?

The Chancellor of the Exchequer will present the Budget on Monday 29 October 2018, against a backdrop of relatively favourable economic conditions but considerable uncertainty about the outcome of the Brexit negotiations. The following are some of the areas where the Chancellor may be considering making changes.

Is your VAT group still valid?

The recent Barclays Bank tax demand of £184m in backdated VAT should serve as a powerful reminder of the importance of compliance with VAT group requirements for financial services companies. The case indicates HMRC’s current interest in both VAT groups and partially-exempt entities.

Making Tax Digital: are you ready for April 2019?

The taxman is embracing digital technology – and that means businesses need to as well. HMRC’s Making Tax Digital (MTD) initiative goes live from 1 April 2019 – so the clock’s ticking. It’s time to make sure you can meet the new requirements for digital record keeping and understand the new mechanism for submitting VAT returns to HMRC.

GCC: it's time to register for VAT

With less than three months to go before businesses in the GCC are expected to start accounting for VAT, businesses should be well on the way to being ready. Whilst the Executive Order has not yet been released, the Federal Tax Authority (FTA) is still pushing ahead with its plans to implement VAT.

VAT blow for cultural charities and public bodies

The European Court of Justice (ECJ) has finally crushed hopes that more public bodies and charities engaged in cultural activities could claim VAT exemption on their admission charges. Its recent judgment in the VAT case of the British Film Institute (BFI), released in February, draws a line under an argument that has been running for the last four years.

VAT framework agreed by GCC

All Gulf Cooperation Council (GCC) countries have now signed the Unified Value Added Tax (VAT) Agreement. The framework will form the basis for the national legislation which will be introduced in each GCC country. The framework will be made public shortly.

Affiliation fees for sports clubs

HMRC has confirmed that the VAT extra-statutory concession allowing profit-making commercial sports clubs to treat re-charges of affiliation fees to their members as though they were disbursements, will be withdrawn from 1 April 2018.

Zero rating for children’s colouring and dot-to-dot books

From 1 April 2017, colouring and dot-to-dot books will qualify for zero rating provided the content is suitable for sale to children under 18 years old. Where such books are marketed as suitable for adults; or are held out for sale with other adult books and/or not appropriately marked as suitable for children; or  contain certain specified images, they will be standard rated.

Is a 'fractional interest' in a property a holiday let?

A recent First-tier Tribunal decision, in the case of Fortyseven Park Street (the company), has concluded that the supply of a ’fractional interest in a property’ (similar to a time share), should be subject to VAT at the standard rate of 20%, on the basis that the supply is one of accommodation provided by a hotel or ’similar establishment’, a supply which is specifically excluded from exemption further to the VAT Act 1994, Schedule 9, Group 1, item 1(d).

This recent VAT case may have significant implications for exhibition organisers

A recent decision in the Upper Tribunal case of Kati Zombory-Moldovan t/a Craft Carnival has found that an exhibition organiser’s services went beyond the passive supply of a pitch or a licence to occupy land, which would have been exempt from VAT, and was actually the provision of ‘a service of participation as a seller at an expertly organised and expertly run antiques and collectors fair’ and, as such was liable to VAT at the standard rate of 20%.

Family offices – VAT savings on real estate transactions

Through their family offices, high net-worth individuals often have significant property interests. When buying, selling, leasing, constructing, converting or renovating buildings, it is important that the VAT position is considered in advance of any transaction. There are many traps and pitfalls within the VAT rules waiting to catch the unwary. But sensible VAT planning could save you 20%.

Online sales of goods targeted by the UK tax authorities

As part of the tax measures announced in the Budget delivered on 16 March, the UK Government announced measures aimed at what they perceive to be an area of significant non-compliance with VAT obligations. These proposals address the long-standing problem of non-EU suppliers selling goods via the internet who do not register and account for UK VAT (value added tax), undercutting the compliant online and high street retailers.

The Budget 2016 – video summary

A sugar-coated Budget for the next generation

In the uncertain global economic environment, the Chancellor’s deficit-reduction goals have become more challenging. But he still managed to strike an up-beat tone when delivering “a Budget that puts the next generation first”.

Good news for holding companies

HMRC has announced it is revising its policy with regard to VAT recoveries made by holding companies. As a result, it may now be possible to recover VAT, and potentially make a claim for any VAT that has not been recovered or disallowed by HMRC to date.

Do family offices mean business?

The VAT rules often raise some challenging questions for family offices. This is because high net-worth families often have a diverse range of activities, some of which may fall within the VAT rules and others that do not. 

VAT is a tax on goods and services supplied in the course of business. Therefore, if it is not a business activity, it is outside the VAT rules. However, deciding whether an activity is business or non-business can be challenging. 

CASCs: Time to set up a trading subsidiary?

As a community amateur sports club (CASC), should you now be considering setting up a trading subsidiary?

New rules coming into force from 1 April 2016 may make it harder for some CASCs to meet all the requirements necessary to continue benefiting from their current tax advantages. There is, for example, a new income limit restriction as well as new rules covering payments to players.

Draft legislation for the 2016 Finance Bill

The Government has today published draft legislation to be included in the 2016 Finance Bill, together with explanatory notes, amounting in total to several hundred pages.

Most of the material relates to measures that were announced in principle in the July 2015 post-election Budget, or in the Autumn statement on 25 November 2015. In many cases, it reflects the results of consultation exercises.

Planning for challenge to VAT recoveries by HMRC

HMRC is challenging VAT recovery by holding companies operating in the mining and exploration sectors. This is on the basis that HMRC do not believe that they are carrying out ‘business’ or ‘an economic activity’ for VAT purposes. Organisations operating in these sectors are, due to the speculative nature of their activities, and the way in which they are normally structured and funded,  finding themselves potentially looking at significant irrecoverable VAT costs.

An Autumn Statement for “rebuilding Britain”

Five years since delivering his first spending review, George Osborne spent over an hour delivering his 2015 Autumn Statement. He repeatedly stated the Government’s intent to build public services, infrastructure, national defences and strong public finances.

Top 5 VAT issues for family offices

Family offices may encounter a wide range of VAT issues, due to the diverse nature of their activities. Failing to consider the VAT position can result in significant unexpected costs, so reviewing the VAT implications before starting any new activity is important.

VAT exemption for supplies by non-profit making sports clubs

HM Treasury has announced that the Value Added Tax (Sport) Order 2014 (SI 2014/3185) will come into force from 1 January 2015. It will amend the VAT Act to reflect HMRC’s change of policy following the judgment of the Court of Justice of the European Union (CJEU) in Bridport & West Dorset Golf Club (Case C-495/12) (Bridport). This follows Revenue & Customs' Brief 25/14, which explained the implications of the CJEU’s judgment in the Bridport case, and confirming that UK legislation would be amended.

The Autumn Statement – what can we expect?

The Chancellor of the Exchequer will deliver his Autumn Statement on Wednesday 3 December. This will provide an update on the government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility, which will be published the same day.

Reverse charge alert

As a financial services business, you may well not need to register for VAT. You may be primarily making exempt supplies, with any 'VATable' supplies falling below the VAT registration threshold.

The Budget 2014 – summary

In a speech full of sound bites, the Chancellor’s 2014 Budget repeated past themes – the need to build a resilient economy and for Britain to live within its means. But his dominant message was new: this was a Budget for “the makers, the doers and the savers”.

Intrastat changes from 1 January 2014

As publicised by HMRC in Revenue & Customs Brief 38/13 dated 16 December 2013, the Intrastat exemption threshold for arrivals has doubled from £600,000 to £1,200,000 with effect from 1 January 2014. The threshold for dispatches remains unchanged at £250,000, and the threshold for supplying additional information relating to delivery terms increases from £16 million to £24 million.

Pension fund VAT exemption

ATP is the latest case to be referred to the Court of Justice of the European Union (CJEU) on the VAT exemption for fund management services. Essentially, the question in ATP is whether DC pension schemes are sufficiently similar to other funds which already benefit from the VAT exemption. If they are, the principle of ‘fiscal neutrality’ dictates that DC pension schemes must also benefit from the VAT exemption for fund management services, in order to maintain a level playing field.