2019: VAT, Brexit and all that….

Well, here we are back again with Brexit on the news all the time  And in typical British style, it’s beginning to feel like a Monty Python sketch or at least a real, honest to goodness, British farce.

HMRC has issued some guidance and written to certain businesses about import/export arrangements for a “no-deal” Brexit, with information about some transitional arrangements to keep goods moving in and out of the UK.

But for the rest of us, there is very little information about trading after Brexit and it’s all starting to feel a bit surreal.  There is some limited subject matter about VAT in the draft treaty, including about the UK will apply certain EC VAT systems, as well as some guidance for MOSS businesses.  But for the most part, we still don’t know how UK legislation will be affected for those of with clients in other EU countries.

So in the meantime, it’s business as usual.  We can’t do much else given the current situation as far as Brexit is concerned.  Let’s hope they get this issue sorted very soon because trying to trade with this level of uncertainty is not good for anybody.

Otherwise, it’s business as usual.  Here’s more of the “normal” stuff:

HMRC issued some guidance on other VAT issues under the following Revenue & Customs Briefs 11 – 13 http://tinyurl.com/hb5uotp at the end of 2018:

R & C Brief 11: Changes to the rules relating to the VAT exemption for English Higher Education providers.

R & C Brief 12: Procedural amendments to the VAT Refunds scheme for non-EC busines: ses

R & C Brief 13: From 1 March 2019, businesses must pay VAT all payments for goods and services which customers pay for but fail to collect or use.  This will mostly affect hotels, car rental companies and other retail businesses who require a deposit or advance payments.

If you’re  sorting out year end management charges or cost sharing, check out my book: VAT on inter-company transactions and management charges http://tinyurl.com/yd3z7gq8 as an ebook on this website or as a paperback from Amazon http://tinyurl.com/y6whc3tu.

Zero-rated construction and VAT certificates

If you are hiring a contractor to build a property for certain residential or charitable purposes, you have to issue a certificate to the contract to confirm that the work qualifies for the reduced rate.  “Relevant charitable purposes” can include the use by a local community to provide social or recreational purposes other than for business activities.

It’s important that certificates are issued in the correct situations.  HMRC penalises anybody who issues a certificate incorrectly; for example if a charity issues a certificate, but uses the property for non-qualifying use, such as certain sporting clubs.

For more information on this subject, check out Neil Warren’s recent very amusing and informative article on AccountingWeb: HMRC loses tax rematch with football club http://tinyurl.com/ybz8lyjj about a penalty issued for the incorrect use of a certificate, which was eventually won by the charity.

I hope you all have a very happy, healthy and prosperous 2019!

Marie

January, 2019

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