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Business Alert: 2 July 2007 |
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Welcome to Moore Stephens’ Business Alert Service, designed to help you keep up-to-date with business and tax legislation. The service provides details of key changes, issues and opportunities, and includes suggested action and links to more information.
To receive these Business Alerts automatically, email businessalerts@moorestephens.com.
OFFSHORE DISCLOSURE REGIME
Now that the deadline has passed for taxpayers to contact HMRC regarding income on foreign bank accounts that they have not previously declared for tax purposes, some information has been forthcoming about how the information disclosed will be handled. Taxpayers have until November to declare the income and pay the tax, interest and penalties according to their own calculations, which may need to be estimated if the account has been open for many years. Once this has happened, most of those making a disclosure will hear no more of the matter. Around 15% of them will have their calculations and information checked against HMRC records. Those who have not come forward are already in the course of being identified (work started on Monday 25 June) and will be followed up. HMRC have indicated that it is likely that some will be considered for criminal prosecution.
THEATRES AND VAT INPUT TAX
The production costs incurred by theatres relate to the productions they stage and hence the exempt ticket receipts. Mayflower tried to argue that the production costs that they were charged by touring companies related to various other supplies which were taxable, such as the programmes sold. The Theatre argued that the production costs charged by the touring companies were 'residual' VAT and therefore partly recoverable. They also put forward an argument about 'taxable tickets' which related to sponsorship. The Court of Appeal has ruled out all of these arguments, including the taxable tickets, which were previously accepted by the High Court. However, the Court of Appeal has allowed that the supply by the production company provides material which is reproduced in the printed programmes such as Logo’s etc and these make the production costs residual, although to quite a limited extent. Information about how to recover VAT on such costs, and the treatment of VAT previously recovered under the 'taxable tickets' rule is available as Revenue and Customs Brief 45/07.
VAT REGISTRATION DELAYS
The delays in VAT registration are continuing to rise at present. The delays have a number of factors behind them, principal being the need to screen all applications in view of Missing Trader fraud, as a VAT registration is a necessary aspect of committing large scale fraud. HMRC have put measures in place both to improve processing and deal with fraud, but it will take some months before real benefits are seen. Meanwhile the tax authority is requesting that businesses do not phone requesting information about their VAT registration, as this is taking up time which could be spent processing registrations.
We believe the information in this Business Alert to be correct at the time it was sent, but cannot accept any responsibility for any loss occasioned to any person as a result of action or refraining from action as a result of any item herein.
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