Budget 2009
Ah, yes, the Budget. I was in the Highlands of Scotland on Budget Day, and was fortunate to be able to find Internet access in a pub, an hour or two after the Chancellor sat down. The fact that it's taken me several weeks to comment on it might give you a clue as to how exciting I found it.
Even now it's difficult to get eloquent about the VAT registration limit going up (to £68k) or a change in the fuel scale charge. For the record, though, here's the merest flavour of the other changes:
Option to tax – a new "Automatic Permission Condition" being brought in. This will allow many more businesses to "opt to tax", without having to seek permission first.
5% rate for children’s safety seats extended to include bases from 1 July 2009
There was an announcement about a few changes to happen in 2010, including minor changes to the "Place of supply" rules and the intra-EU VAT refund system. The latter change should make it easier for UK businesses to achieve refunds of VAT incurred in other Member States.
VAT – partial exemption changes
HMRC have announced changes to the basic partial exemption rules, most of which will have a beneficial effect on businesses afflicted by this concept. Affected businesses are those that have exempt income as well as taxable income, and who are obliged to disallow a certain amount of VAT on expenditure. In simple terms, those changes are:
• Instead of doing a quarterly calculation, based on that quarter’s figures, the business can utilise the previous year’s annual average and apply it to this year’s figures. An annual adjustment is then carried out at the year end, and that percentage is used for the next 12 months.
• Presently, when the obligatory annual adjustment is carried out, the resulting VAT adjustment has to be made on the next VAT return of the new year. HMRC are now proposing that the business can make the adjustment in the last VAT return of the previous year instead.
• A potential ‘use – based’ method can be utilised for new businesses, where the normal trading pattern has not yet established itself. Thus the first year, with heavy expenditure, might otherwise fall to have a very low VAT recovery rate.
The above three measures are voluntary and the decision whether or not to adopt them will very much depend on individual circumstances.
The fourth change is compulsory, but as it is specific to the following types of supplies I will not bore everyone else with the detail:
• supplies of services to customers outside the UK
• certain financial supplies such as shares and bonds
• supplies made from establishments located outside the UK
If you consider that you may be affected by any of the above, please ask for further details.
NB: although the changes are effective from 1/4/09, the fine print points out that this means VAT returns commencing on or after 1 April 2009.
www.davebrownvat.co.uk
Business entertainment – foreign customers
Hot off the press, for once - HMRC have taken notice of a European Court of Justice judgement in the case of Danfoss and Astrazeneca (Case - 371/07).
Historically, the VAT Office allowed UK businesses to reclaim VAT on entertainment of foreign customers. Then they didn't, and that's the way it has remained for a large number of years. Following the above mentioned case, HMRC have invited retrospective claims from businesses that have not reclaimed it. Act now though - if you can put together the figures quickly enough (by 31 March 2009), you can submit a claim back to 1 August 1988. If the claim is submitted after 1 March 2009, you will be limited to three years' worth.
Listed Property Show – 21/2/09 and 22/2/09
For the third year running, I have been asked to participate in the Listed Property Show at the Olympia Exhibition Centre in London. I will be manning a stand at the show, and also presenting a lecture each day, on the subject of (you guessed) VAT and listed buildings.
Apart from the obvious joys of VAT, the hall is packed with exhibitors who are engaged in pretty much all aspects of historic house restoration and maintenance. It is well worth a visit.
After the event: yes, an interesting couple of days, and if you missed it make a point of considering it next year - undoubtedly around the third week in February.
www.davebrownvat.com
VAT – option to tax office move
HMRC have announced that their National Option To Tax Unit is moving, with effect from 4 February 2009, to:
Option to Tax National Unit
Cotton House
7 Cochrane Street
GLASGOW G1 1GY
Tel: 0141 285 4174/4175
Fax: 0141 285 4454
During the relocation period, they would prefer to receive emails rather than letters or faxes. Unbelievably, they don't give an email address - just a link on the web-site. So, first you have to find the website - not too difficult; then, try the link for "VAT". Then - this looks good - "Latest VAT Updates". But, no, there is no mention of it there. OK, let's start again, put "Option to tax" in the search facility at the top of the page. Yes there is mention of it, but in Victor Meldrew mode I'll admit to murmuring the well used "I don't believe it". Under the fourth link, there is the start of a sentence about the option to tax unit moving, but the sentence stops after the word "Cochrane" in the address. No link, no way of accessing the rest of the contact details.
OK, HMRC, you've got me, I give up.
PS - nope, I don't give up that easily. I went back to HMRC home page and thought I'd try (at the bottom of the page) "What's new". Nothing at first, but please persevere, scroll down to 26 January 2009 and you will find the announcement, with link to the relevant page, which in turn has a link to a comments box. I'd have to suggest that it would be difficult to lodge an option to tax notification using a comments box, as it would appear to be a tad difficult to attach a document to it. But at least we've got the address...
Could do better, methinks.
www.davebrownvat.co.uk
2009 Intrastat Threshold increased
At the start of every new year, HMRC revise the threshold applying to the Intrastat regulations, and this year is no exception. The threshold has been increased from £260,000 to £270,000.
You may be wondering what Intrastat is, and why anyone should be interested. At the risk of getting technical, this is an intra-EU statistical exercise, designed to let someone, somewhere know what goods are being sold across Europe. If your sales or purchases of goods, to or from other EU Member States, in a calendar year exceed the £270,000 figure, you are thenceforth obliged to render unto HMRC a monthly form, detailing all manner of useful information – what the goods are, what value, what weight, ad nauseum. Now you know…
www.davebrownvat.co.uk