VAT Advice and Services

Small VAT-registered businesses have until April 2022 to prepare for a shake-up in the way they submit VAT returns.

As employers gear up for the Christmas party season for the first time in two years, they need to take care to avoid a tax hangover.

The government confirmed on 23 September that, following concerted feedback from a range of stakeholders, the planned introduction of MTD for income tax in April 2023 will be delayed until April 2024.

HM Revenue & Customs (HMRC) has updated their guidance on the new regime for penalties and interest for late payment of tax. This is the next step in an ongoing process of unifying the rules across all the taxes.

An ongoing area of risk for both VAT registered and Non-VAT registered businesses is the place of supply of their services, as there are many small differences which can catch suppliers out. For VAT purposes, the place of supply is generally where a business is liable to charge VAT.

There is a special mechanism to recover VAT incurred on building, or converting a non-residential property into, a new home for you or a family member to live in. This is often referred to as a DIY VAT claim and is well worth exploring to recover some of the VAT costs that could otherwise be forgotten about.

When Making Tax Digital for VAT (MTD) was introduced back in 2019, it was compulsory for most businesses trading above the VAT threshold of £85,000 to keep records in a digital format and submit their VAT returns using MTD compatible software.

In response to HMRC's consultation on simplifying the rules relating to land and property, the Institute of Chartered Accountants in England and Wales (ICAEW) has urged HMRC to abolish all VAT exemptions and remove all VAT options.

A recent Court of Appeal case concerning the Royal Opera House Foundation has decided that that there was no direct and immediate link between the costs of staging productions and their taxable supplies of catering etc. The production costs were found to be ‘directly and immediately linked’ to ticket sales which are exempt from VAT due to the cultural exemption rules and the VAT costs incurred on them as a consequence was irrecoverable.

Three schemes were launched on 1 July to deal with VAT on business-to-consumer supplies of goods and services to EU customers.

The Supreme Court’s recent decision in Balhousie Holdings [Balhousie Holdings Ltd v HMRC [2021] UKSC 11] indicates that care home operators (and other entities such as charities and universities) may be able to use sell and lease back arrangements to finance the construction of new buildings without incurring a significant VAT penalty.

If you are involved with the demolition or development of a building then consideration should be given to the VAT position and whether it can be reclaimed. Generally speaking, VAT costs would need to be incurred solely in relation to the making of taxable supplies whether they are currently being made or if there is an intention to make taxable supplies.

A recent Court of Appeal case has decided against two organisations that provided day care services.

Businesses that deferred VAT payments last year have less than a month left to join online and pay in monthly instalments under the VAT Deferral New Payment Scheme, HMRC has warned.

HMRC’s new VAT deferral payment scheme is now open to all eligible businesses, including those businesses using the Payment on Account and Annual Accounting schemes.

From 1 March 2021, if your VAT-registered business provides certain supplies of construction services to another business you may no longer need to charge them VAT. This is because your customer may need to account for it under the new domestic reverse charge for construction services.

Complicated new VAT rules post-Brexit are causing big headaches for both importers and exporters - and with a change in the system unlikely to happen, businesses are going to have to get to grips with the new VAT regime or else stop trading with the EU.

In the latest of our series of weekly Brexit Blogs, Mary Schofield of Lovewell Blake explains how the government is planning a phased introduction of import controls once the transition period comes to an end.

The original method of filing VAT returns in Xero is changing soon and we are assisting our clients to be ready for this.

In the latest of our series of weekly Brexit Blogs, Rob Geary explains how Brexit will result in changes to VAT rules which will affect any business importing or exporting goods.

‘A recent first-tier tribunal case, Wickford Development Co Limited v HMRC, has been found in favour of the taxpayer, raising again the possibility of HMRC incorrectly interpreting the scope of the ‘Builder’s Block’, this being HMRC’s block on builders and contractors recovering input VAT incurred on goods that are not ‘building materials ordinarily incorporated in a building’.

Previously, HMRC guidance stated that when customers are charged early termination fees to withdraw from contracts, or payments are required for breach of contract, then these charges are not generally relating to a supply and are outside the scope of VAT.

Many businesses purchase vehicles to support their day-to-day operations. Whilst it may be assumed that, as a vehicle is being acquired by a business to support their activities, the VAT incurred on the purchase costs would be recoverable, this is often not the case.

At present, only VAT registered businesses with a taxable turnover greater than £85,000 are required to register for Making Tax Digital (MTD) and submit their returns through compatible software.

Whilst delivering the summer statement in Parliament on 8 July 2020, the Chancellor of the Exchequer, Rishi Sunak, presented his ‘Plan for Jobs’ worth up to £30 billion to help Britain bounce back from the Coronavirus outbreak.

A temporary VAT zero rate will apply to all supplies of PPE which are made between 1 May and 31 October 2020.

The CJEU has considered a VAT case concerning the recovery of overhead VAT costs for a partially exempt business who supplied goods by way of hire purchase (the taxable supply) and the supply of credit (the exempt supply).

If your VAT-registered business provides construction services to another business you will no longer need to charge them VAT.

VAT, PAYE and Corporation Tax payments falling due can be deferred – but should you.

Making Tax Digital (MTD) for VAT was introduced on 1 April 2019 for all business trading above £85,000 of taxable supplies, with an extension until 1 October 2019 for some businesses eg groups.

A recent Upper Tier Tribunal case has resulted in digital newspapers being judged the same as hard copy printed newspapers and therefore zero rated. Prior to the case, digital publications were seen by HMRC as standard rated.

From 1 January 2020, the European Commission are introducing a number of ‘quick fixes’ aiming to simplify and harmonise EU VAT rules regarding intra-EU supplies of goods.

There are some VAT reliefs for disabled people. These typically relate to goods, however certain building works also qualify for VAT relief.

An ‘option to tax’ is a formal declaration made by a VAT registered entity which has an interest in a commercial property or land. The interest can be freehold or leasehold.

Many VAT registered businesses have at some point queried whether they can reclaim the VAT on an expense.