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Monthly Newsletter - August 2006
In this issue:
Flood of claims expected in to Customs Due to the double defeat Customs have faced in the cases of Fleming T/A Bodycraft and Conde Nast, it is expected that a flood of claims will pour into Customs, as taxpayers demand repayments that were previously disallowed by the 3 year capping provisions. If you have any clients that may benefit from the results in these cases, please contact us on the numbers below for further advice.
Changes to reverse charge procedures for Mobile Phone traders and similar commodities Customs are holding consultations with interested parties on the subject of the change to the rules on the reverse charge procedure, that will be brought in to avoid ‘Carousel Fraud’. An invitation has been opened for written comments on the proposed changes to be received by the 31st August. It is anticipated that the changes will occur in October 2006 and Customs have advised those affected to begin preparations to change their accounting procedures. For further information please see Business Brief 10/06.
Clarification of HMRC's policy following decision in Newnham College Customs have confirmed that they will be appealing to the House of Lords over this decision. So far the College has been successful in arguing that it does not have occupancy of a library as it has no licence to occupy and thus its option to tax is not disapplied by the anti avoidance provisions. Until the case has been settled Customs will accept that taxpayers in similar situations can still recover input VAT on the property transaction. However they may issue protective assessments for which recovery action will not be taken until the outcome of the case is known. For further information please see Business Brief 09/06
Further to the consultation in December 2005 on the proposed re-drafting of VAT Act 1994, Schedule 10, Paragraph 8, Customs have decided to make no changes to the rules regarding beneficial and nominee owners at this stage. For further information please see Business Brief 08/06
Customs have issued clarification on the treatment of discounts offered by travel agents when securing a holiday from a customer using their services. The total amount received by the tour operator, which includes the amount paid by the travel agent to provide the customer with the discount, is the consideration that is used in the margin calculations for VAT purposes. There is no separate supply of a ‘right to a discount’. For further information please see Business Brief 08/06
In 2008 Jersey intends to introduce a broadly based Goods and Services Tax, with very few exemptions apart from financial services and insurance. There is currently ongoing consultation due to end on 31 August 2006 regarding the draft legislation. For further information please contact us on the numbers below.
Smarter Money Ltd v Revenue and Customs In this case Customs argued that the Appellant could not exempt their services under VATA 1994, Schedule 9, Group 5. They maintained that as the service was provided through various websites run by the Appellant it had no direct input to the provision of financial services as an intermediary. They were just providers of information. The case was found for the Appellant as they had provided negotiations electronically and did not need the financial contracts to be concluded in order to successfully provide intermediary services.
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