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Where has this year gone? We’ve already passed the longest day and we’re all hoping Andy Murray will win his match at Wimbledon today!. Soon it’ll be the school summer holidays, then it’s all downhill to Christmas! Back to school ranges are already in most of the major shopping chains. Doubtless the Christmas decorations will be out soon…
In the meantime, the VAT world remains busy and I’ve been dealing with some interesting issues over the past couple of months.
Golf Clubs and supplies to non-members
The First Tier Tribunal in Bridgport & West Dorset v HMRC has recently ruled that supplies of green fees to non-members should be exempt under EC law, so that golf clubs which have accounted for VAT on such income have overdeclared VAT and can submit repayment claims to HMRC. The Tribunal took the view that the UK legislation doesn’t properly reflect the relevant clauses of the EC VAT Directive that allow supplies to non-members to be taxable.
The decision has only just been released and we don’t know whether HMRC will appeal the decision. However the amounts of VAT involved in this case alone are substantial – over £200k of “overdeclared” VAT – so I suspect that HMRC will not take the decision lying down.
But in the meantime, you might want to consider submitting protective claims for over-declared VAT pending developments in the case. The decision should also apply to similar supplies by other member’s clubs as well as golf clubs. I’ll keep an eye on this over the next couple of months and let you know of developments.
New sections on vatexchange.co.uk
Two of the most common areas for queries are EC VAT and VAT and charities. So I’ve added a couple of new sections on the website to help you find answers.
The new section on EC VAT, http://tinyurl.com/6ya4zl2 includes links to a number of different resources which provide information about EC VAT. It includes the main HMRC notices on EC supplies of goods and services as well as links to the EC’s website which includes a lot of very detailed information relating to individual countries. I’ve also listed a few textbooks that can help, but do let me know of any other resources that could be added to the list.
VAT and charities is one of the most complex and lengthy subjects within VAT and I know that there is almost too much information for the general practitioner to know where to start. Another new section on vatexchange.co.uk: Charities http://tinyurl.com/5w56dkp lists the main reliefs available to different types of expenditure, from aids for the disabled to construction for charitable use and links to the main HMRC notices for more detailed information.
This is a huge subject and I know that it’s sometimes difficult to know whether you’ve covered all the relevant aspects relating to any one particular issue. Remember you can always put queries on the forum if you need help “connecting the dots” or contact me directly if you need more detailed advice.
Updated version VAT Notice 706: Partial Exemption http://tinyurl.com/5sgdjjq
This new version is essential reading for any of us who have clients who are partly exempt. It contains guidance on 2 very important recent developments; see section 4.4 for a summary of simplifications for businesses using the standard method and section 2.2 about the integration of business/non-business calculation with partial exemption and the extention of the Capital Goods Scheme to B/NB expenditure and other assets. It’s the first new version of the notice for several years and you really need to know your way round the notice if you have partly exempt clients, particularly those using the standard method.
Flat Rate Scheme and bank interest
I know that many of you have clients who use the Flat Rate Scheme. Following a recent decision in the First-Tier Tribunal it’s now established that in many cases, bank interest income is not “relevant turnover” for the purposes of the scheme. If you’ve included interest income in FRS calculations, then of course you can claim any overdeclared VAT back under the normal 4 year rule. And you can exclude such income from future calculations. I know it probably won’t make a huge amount of difference to the final FRS VAT liability as most smaller businesses don’t have large amounts of cash in the bank, but it’s worth knowing for future reference. There is a short article here on the website http://tinyurl.com/5r68qcd explaining when the decision applies.
And finally…
Please contact me if you want to discuss anything VAT related – whether on the forums, by email or by phone for an initial no-obligation discussion.
In the meantime, I hope you’re all keeping busy and have some good plans for the summer months.
Kind regards
Marie
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