As I sit at my desk dictating this newsletter, the television is full of news articles and various programmes commemorating the 10 year anniversary of the dreadful 9/11 attacks in America. Let’s hope that this ten-year anniversary heralds the start of a more peaceful world for us all.
In the meantime, after what has been a pretty miserable summer, we seem to be heading into an early autumn and potentially another hard winter. Thankfully, the world of VAT has plenty to keep us occupied during the cold days and dark nights! Here are some of the most important:
- Remember that HMRC’s VAT Initiative ends on 30 September. Use this opportunity to deal with any outstanding VAT issues that have been a concern. For example,if you have treated certain supplies as zero rated but believe that they could be liable to VAT at the standard rate,contact HMRC under the VAT Initiative by 30 September to bring the issue to their attention. Even if the business ends up with a VAT bill, at least it would have the benefit of the reduced penalty arrangements. See http://tinyurl.com/6yqohna for information about the Initiative from HMRC.
- Insolvency practitioners should review their VAT affairs following the ruling in PAYMEX Limited. The First Tier Tribunal ruled that IVA nominee and supervisory services provided by insolvency practitioners are exempt from VAT. IPs can now exempt such supplies but they also need to review their VAT recovery arrangements, both historic and future, as they may now be partly exempt and have to repay input tax to HMRC. They may be entitled to reclaim over paid output tax if they can demonstrate that they would not be “unjustly enriched”.See Revenue & Customs Brief 27/11 http://tinyurl.com/4y7wx2b for further details.
- VAT is due on supplies made to staff under salary sacrifice arrangements from 1 January 2012. Historically, HMRC has not regarded salary sacrifice schemes as constituting consideration for supplies of goods or services from an employer to an employee. However, following the ruling of the European Court of Justice in the case of Astra Zeneca UK Ltd, which concerned the provision of retail vouchers to staff under the salary sacrifice arrangements, HMRC have confirmed that they will be extending the policy to other taxable goods and services from 1 January next year. This is potentially a complex subject as the VAT treatment of different types of employee benefits will have to be reviewed and accounting arrangements put in place to deal with the liabilities by the end of the year. HMRC have provided some guidance in Revenue & Business Brief 28/11 http://tinyurl.com/3t67dte so do take the time to look at this and consider how it applies to your business or that of your clients.
- VAT Online Consultation. HMRC have launched a consultation process about their plans to bring more VAT processes online from April 2012. See further information here http://tinyurl.com/3hxd72b
All of the subjects mentioned above are potentially complex and can affect different businesses in different ways,so please don’t hesitate to call me if you need any help on any of these issues. I will let you know of any further developments over the next few months.
I’ve had a few queries about potential VAT claims arising from the Tribunal decision in Bridport & West Dorset Golf Club, which ruled that certain supplies to non-members are exempt from VAT. HMRC are appealing the Tribunal’s decision and have made it clear that they will reject any protective claims that are submitted in the meantime. See Revenue & Business Brief 30/11 http://tinyurl.com/3zwmb5a. The Tribunal decision is based on a very narrow interpretation of EC/UK law and I doubt that HMRC will accept the decision without a very hard fight. In any event, any claims for overpaid VAT would only be paid if they satisfied the very restrictive “unjust enrichment” rules. So my advice at this stage is simply to watch out for further developments.
And finally, those property deals seem to keep happening, recession or not! You all know by now that there is no such thing as a “simple” property transaction when it comes to VAT, so please contact me as soon as possible for advice on property issues.
In particular, sort out the VAT issues well in advance, before the price is “legally fixed” if option to tax issues are involved; or before any payment is made in respect of construction work requiring certificates to claim VAT zero-rating or reduced rating.
Remember to check out www.vatexchange.co.uk for regular updates or to put your queries on the forum. Hope you have a productive autumn and don’t hesitate to contact me if you need help on any VAT issue.
Marie