News
Monthly VAT news - September 2011 - 2011-09-30
Compulsory online filing of VAT returns from April 2012 - Reminder
HMRC has issued a reminder that all VAT businesses registered before 1 April 2010 with an annual turnover of less than £100,000 will be required to submit their VAT returns online and pay their VAT electronically from 1 April 2012. Businesses will therefore need to enrol online for this service before this date.
Changes to Intrastat declarations from April 2012
HMRC Trade Statistics has announced plans to change the way in which businesses provide Intrastat returns. The monthly deadline for submitting Intrastats will be brought forward from the last day to the 21st day of the month following the month to which the trade relates. It will also become mandatory for Intrastats to be submitted online electronically, as opposed to on paper. The proposed changes will take place from 1 April 2012 and HMRC will publish draft legislation on this later this year. Further information can be found at www.uktradeinfo.com.
Reed Employment Limited - VAT on commission for use of temporary staff
The First Tier Tribunal has held in the Reed Employment Limited case that the provision of temporary staff to its clients is a supply of introductory services, as opposed to a supply of staff. Therefore, Reed need only account for VAT on the commission element of this charge. HMRC has announced that this ruling has no wider impact and only applies to the parties involved in this appeal and therefore the provisions of VAT Information Note 03/09 still apply and a bureau acting as agent only has to account for VAT on its commission, whilst a bureau acting as principal has to account for VAT on the full amount charged to its clients. This ruling is disappointing but not unexpected and there is likely to be further litigation on this matter going forward.
Reverse charge on services received from abroad – A reminder
Following changes in 2010/2011, the place of supply of most services to business customers became the place where the customer belongs. Therefore, the reverse charge is applicable for the majority of cross border services; essentially, business customers are liable to account for VAT on most services provided by their overseas suppliers, rather than the supplier charging VAT if in another EU member state. The business customer can then recover the VAT subject to the normal rules. This applies to most services with a few specified exceptions where the place of supply is where the service is carried out, and not driven by the customer's place of establishment; these include land related services, hotel and catering and admission to cultural, artistic, sporting educational and entertainment events. Surprisingly, the leasing of assets is treated as a supply of services, not goods and, therefore, the reverse charge rule above applies, although it is also subject to “use and enjoyment” provisions. This effectively means that if the equipment was used outside the EU, no VAT would be chargeable on the supply. If it was used within the EU, and the supply is made from another EU country or a non-EU country, then the reverse charge applies and the customer charges VAT and recovers it subject to the normal rules. This will be of particular importance to partially exempt businesses such as the education, finance and insurance sectors, as well as charitable organisations.
Paymex Limited – HMRC issue further clarification one IVA fees
HMRC has issued its response in relation to the Tribunal ruling in the Paymex Limited case; it has clarified that the decision applies to all Individual Voluntary Arrangements (IVAs), not solely consumer IVAs. HMRC is now accepting refund claims for overdeclared VAT by Insolvency Practitioners (IPs) over the last four years, but such claims will be subject to the unjust enrichment provisions.
For further information or advice about any of these issues please contact indirect tax partner Bob Jones on 020 7516 2295 or by email rjones@littlejohnllp.com
