Monthly Newsletter - November 2006

In this issue:

• Liability of Private Tuition
  
• Changes to VAT Law in light o the Gambling Act
  
• Partial Exemption for Bookmakers
  
• Charity zero-rating and Amateur Sports Clubs
  
• Private use of vans
  
• VAT liability of Disposable Barbecues

Liability of Private Tuition

HMRC have successfully appealed against the Tribunal decision made in the case of Empowerment Enterprises Limited.  HMRC have confirmed that the VAT exemption for private tuition only applies to sole proprietors and partnerships who teach a subject ordinarily taught in a number of schools or universities.

Those who have been exempting tuition provided by directors of limited companies or employees of sole traders, partnerships or limited companies on the back of the Tribunal decision should now review their liabilities and submit a Voluntary Disclosure where appropriate.

For further details see BB 16/06.

Changes to VAT law in light of the Gambling Act

Two new Treasury Orders are due to make changes to the VAT law as from 1 November 2006.  The new law continues to update the VAT law in light of the Gambling Act, changes will include ensuring that any game of chance which is not played for a prize does not fall within the exemption and the provision of a new definition of a ‘game of chance’. 

For further details please see BB 16/06.

Partial Exemption for Bookmakers

Following the Tribunal case of Town and County Factors, HMRC have accepted the decision that bookmakers who add content to specialist racing TV to advertise their taxable services (such as refreshments and gaming machines) may now treat the VAT as residual.

However, HMRC do remain of the view that, where no such extra content is added, the VAT incurred is wholly attributable to exempt betting supplies and is therefore not recoverable.

Charity zero-rating and Amateur Sports Clubs

This amateur sports club had recently had constructed a new toilet block to include a disabled toilet as required by the Disability Discrimination Act 2004.  The club felt that the works relating to the disabled toilet should be zero-rated under Group 12, Sch 8, VAT Act 1994, as under other areas of taxation it enjoyed the same benefits as charities therefore they felt they were subject to anomalous tax treatment.

HMRC understood that the appellant was entitled to tax treatment as though it were a charity in other areas of taxation; however it was quick to point out that those tax treatments were similar to those of a charity but did not actually treat the appellant as a charity.  Therefore there was no actually no anomaly.

Private use of vans

HMRC are targeting the private use on those providing fuel for vans used employees.  Where road fuel is used for private motoring then the normal VAT rules apply.  The VAT on fuel supplied to a registered person for use by employees can be treated as input tax and VAT must be accounted for on any private use.   Alternatively, an apportionment to the input VAT claimed may be made.

It is worth noting that the private use of Vans differs from the P11D treatment on fuel provided on vans.   

VAT liability of disposable barbecues

HMRC have been asked to clarify the VAT treatment on the sale of disposable barbecues as some retailers have been treating them as reduced rate or mixed rate supplies.  HMRC have confirmed however that the sale of a disposable barbecue is a single standard rated supply subject to VAT at the standard rate. 

The winter may be a quiet time for retailers to review their VAT treatment ready for next summer!

For further information regarding any of these articles or any other VAT issue, please phone us on 01962 735350 or e-mail us at: vat@thevatconsultancy.com