VAT Articles Articles

The UBER effect

Over the last few years, many words have been written in regard to UBER’s challenges with HMRC, most famously the decision in 2022 of the High Courts that UBER drivers are to be given employment rights. The knock-on effect of this decision was that, for VAT purposes, UBER were not an agent in a supply…

Do you supply serviced, holiday or leisure accommodation? You may have paid too much VAT!

A recent First Tier tribunal decision in the case of Sonder Europe Ltd v HMRC [2023] TC08853 has gone against HMRC’s existing policy that “if you hire, lease or rent accommodation under an agreement whereby you take responsibility for the upkeep of the property and you are required to undertake any maintenance to the fabric…

Earning a commission, surely that’s not subject to VAT?

The VAT liability of earning a commission is a subject we regularly get asked questions about on the VAT helplines. As per usual these days the answer is never as straightforward as you think it should be. Commission income (also referred to as an agency fee, intermediary service, or a broker’s fee) occurs when a…

Changes to the second-hand margin scheme for cars which are bought in Great Britain and moved to Northern Ireland

A new scheme has been introduced with effect from 1 May 2023 under “The 2023 Value Added Tax (margin schemes and removal or export of goods: VAT related payments) order”. It has been introduced to resolve a VAT issue for businesses trading in second-hand motor vehicles in Northern Ireland that have been sourced from Great…

New Late Return and Payment Penalty System

In the past, many businesses will have been subjected to the Default Surcharge regime that penalised them for either submitting or paying VAT returns after the due date or the date they were due to be paid in full. That penalty regime was significantly ‘black and white, as it took no notice of how late…

Is it a business?

For approximately 40 years, HMRC have relied upon a published set of 6 questions, derived from the historic Tribunal cases involving Lord Fisher and Morrison’s Academy Boarding Houses Association, to be asked and considered when deciding if an activity undertaken should be considered a business activity within the context of VAT. The questions were: Is…

The organisation of football and netball leagues and pitch hire have been held to amount to the exempt grant of an interest in land, by the Upper Tribunal (UT) in the Netbusters (UK) Ltd v HMRC [2020] UKFTT 0438 (TC) (2 November 2020)

The question was is this a supply of an interest in land or a supply of sports league services? The appellant Netbusters (UK) Limited (NUL) is registered for VAT and organises competitive football and netball leagues. It enters into binding agreements with third parties, such as local authorities and schools, to hire venues belonging to…

Recovery of VAT incurred on digital services prior to VAT registration

We receive many queries regarding the charging of VAT on supplies of digital services supplied by overseas suppliers to UK businesses before they register for VAT and whether that VAT can be recovered as input tax once the UK business registers for VAT; queries such as: “My client is a Limited Company and was trading…

Making Tax Digital (MTD) is being imposed on everyone

HMRC have published a policy paper outlining the final phase of Making Tax Digital (MTD) for VAT returns which means that from April 2022 MTD's being imposed on everyone . So far, the only VAT registrations that have had to comply with MTD are those trading above the £85k compulsory registration threshold. This final phase…

VAT – Temporary reduced rating, and the return to normal for hospitality, holiday accommodation and attractions

It did not take long for the effects of lockdown to be felt in the hospitality sector, and while some food and beverage businesses were resourceful in establishing new working patterns to accommodate fewer covers, or develop a takeaway offering, the same could not be said of the hotel and attractions businesses that so many…

B2C professional services to EU from 1/7/2021

Since Brexit, the supply of professional services listed within section 12.2 of VAT Notice 741 by UK suppliers to EU consumers (B2C) are subject to an exception to the general UK place of supply of service rules and are therefore deemed to be made where customer belongs and so taxable in that EU Member State.…

Claiming VAT on the construction of a new working farmhouse

So, your client is a VAT registered farmer operating a full-time farming business and lives in the onsite farmhouse. Previously your client has had to have the roof of the farmhouse repaired and a new heating system installed to replace the old one and you previously claimed 70% of the VAT incurred on these repairs,…

Can HMRC contact you?

Since the introduction of MTD, HMRC has had 2 systems handling VAT returns and payments; one for MTD users and one for non-MTD users. In April 2021 they began migration to a single system for both but they have apparently run into problems that may result in direct debits payments for returns not being taken…

Urgent: Only One Month Left!

Did your client take advantage of the agreement by HMRC to allow deferral of the payment of VAT due on VAT returns submitted early last year? If so and they haven’t already repaid the deferred VAT, then have they signed up for the VAT Deferral New Payment Scheme to allow them to repayment the deferred…

Budget 2021 – Further Changes Explained

On 3 March 2021 the Chancellor delivered his 2021 Budget upon the backdrop of the current Covid pandemic, and the Governments continued pledge to support businesses through the crisis. While the Budget contained many numbers of changes in regard to the direct side of taxation, there were very a few changes in regards to VAT,…

Changes to the Place of Supply of Services rules

Changes to the Place of Supply of Services rules for UK suppliers after 31/12/2020 Many services provided by UK businesses fall under the general Business to Business (B2B) or Business to non-business Consumer (B2C) rules for deeming where a service is supplied; a B2B supply would be considered to be made where the business customer…

Selling goods to the EU after 31/12/2020

VAT and UK businesses selling goods to the EU after 31/12/2020 With effect from 1/1/2021 sales of goods from the UK to the EU will no longer be EC Sales or Distance Sales but will instead be zero-rated exports for the purposes of UK VAT, whether the customer in the EU is a business or…

Temporary VAT Rate Change in Hospitality and Tourism

Following the easing of the Covid-19 lockdown for businesses in the hospitality and tourism industries and in an attempt to stimulate a recovery in those businesses  the Chancellor has recently announced that VAT on certain supplies of foods and drink, accommodation, or admission to attractions would temporarily be reduced from 20% to 5%, applying to…

Temporary reduction in the VAT rate

Temporary reduction in the VAT rate for hospitality businesses The Chancellor has today announced further measures to assist with job retention and to help stimulate business and the economy as business begin to open up after the Covid-19 lockdown. To help businesses in the tourism and hospitality industries VAT will be temporarily reduced from 20%…

The End of VAT Deferral

VAT Deferral Scheme Many businesses will have taken advantage of the Governments VAT Deferral scheme which allowed a business to defer until 31/3/2021, without penalty, the VAT due to be paid on VAT returns with a due date ending between 20 March 2020 and 30 June 2020; essentially payments due for the quarterly VAT returns…

Coronavirus update – Deferment of July 2020 Payment on Account

HM Treasury have recently released an update on the option for a taxpayer to defer their second Self-Assessment Payment on Account which would usually be due by 31 July 2020. What is it? The Self- Assessment payment on account, that is ordinarily due to be paid to HMRC by 31 July 2020 may now be…