VALUE ADDED TAX

Online Registration and Online Filing of Returns

The Government will require online VAT registration, deregistration and notification of changes with effect from 1 August 2012. The VAT registration threshold for businesses not established in the UK will also be removed from that date. The Government will also require all remaining VAT customers to file their VAT returns online and pay electronically from 1 April 2012.

Zero-rating: Splitting of Supplies

With effect from Royal Assent to Finance Act 2011, zero-rating will no longer apply to printed matter which is ancillary to a differently rated service where, if the service and printed matter had been supplied by a single company, the two supplies would have been treated as a single standard-rated, reduced-rated or exempt supply.

This is an anti-avoidance measure to combat the splitting of an otherwise single supply into its component elements such that one or more of those elements may be zero-rated.

Costs Incurred by Academies

With effect from 1 April 2011, academy schools will be able to recover VAT on costs which are incurred to support their non-business activities (primarily the provision of free education). This is to ensure that academies are treated for VAT purposes in the same way as schools which are controlled by local authorities.

Car Fuel Scale Charges

The scale used to charge VAT on fuel used for private motoring in business cars will be amended from the start of the first VAT period beginning on or after 1 May 2011.

The revised charges are:


 VAT fuel scale charge
CO2 emissions
(grams per km) 		12-month
period		 3-month
period		 1-month
period
120 or less 630 157 52  
125 945 236 78  
130 1,010 252 84
135 1,070 268 89
140 1,135 283 94
145   1,200 299 99
150 1,260 315 105
155 1,325 331 110
160 1,385 346 115
165 1,450 362 120
170 1,515 378 126
175 1,575 394 131
180 1,640 409 136
185 1,705 425 141
190 1,765 441 147  
195 1,830 457 152
200 1,890 472 157
205 1,955 488 162
210 2,020 504 168  
215 2,080 520 173
220 2,145 536 178  
225 or more 2,205 551 183

 

Change of Treatment of Business Samples

Finance Act 2011 will contain legislation to remove the restriction which limits VAT relief on samples to the first such sample. This follows the ECJ decision in EMI (Case C581/08), which held that this restriction was incompatible with European legislation.

The legislation will come into force with effect from Royal Assent to Finance Act 2011. It will, however, have retrospective effect and affected businesses may submit claims, subject to the capping restrictions.

Low Value Consignment Relief

Finance Act 2011 will introduce legislation to reduce, with effect from 1 November 2011, the threshold for low value consignment relief from £18 to £15.

Diplomatic Privilege

Finance Act 2012 will authorise indirect tax and duty reliefs for diplomatic missions, international bodies, visiting NATO forces and European research infrastructure consortiums. With regard to the first three categories, this will provide a statutory basis for reliefs which are currently given by extra-statutory concession.

Fraud on Imported Road Vehicles

The Government has launched a joint initiative between HMRC and the Driver and Vehicle Licensing Agency (DVLA) to combat VAT fraud on road vehicles brought into the UK. Finance Act 2012 will include legislation providing that vehicles entering the country for permanent use on UK roads will have to be notified to HMRC online before they are registered with the DVLA. Private individuals, and businesses which are not registered for VAT, will be required to pay the VAT due at the time of notification. VAT-registered businesses will continue to make payment through their VAT return.