Monthly Newsletter - April 2008

In this issue:

• Budget 2008 Summary
• Employment Agencies
• Intrastat Data
• Sales of Dogs and Cats
• Valuation of Imported Goods
• VAT Tribunal Case - Instamech Ltd
• VAT Tribunal Case - Friends of the Elderley

Budget 2008

A summary of this year's Budget:

• From 1st April 2008 the VAT Registration threshold will increase to £67,000
• VAT Fuel Scale charges will be increased for accounting periods on or after 1st May 2008
• From 1st July 2008 changes to the correction of errors will be introduced
• The reduced rate for the smoking cessation products is extended
• Correct procedures are to be implemented for the restriction of repayment claims for overpaid output and under-claimed input tax
• A transitional period will run until 31st March 2009 in which taxpayers have the right to submit claims for refunds from 1st April 1973 to 1st May 1997
• From 1st June 2008 changes to the election to waive the exemption will be implemented
• From the date that the Finance Bill receives Royal Assent, legal status will be given to extra statutory concessions

For further details please go to our Budget News.

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Employment Agencies

HMRC intend to withdraw the concession that allows the payment of the temporary workers to be recharged VAT free. The result is that the entire sum will attract VAT not just the commission element. This will have a major impact on charities, nursing homes and VAT exempt businesses. Contact us for advice on this hot topic.

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Intrastat Data

HMRC have introduced a new VAT regulation that enables them to use information provided on the Intrastat forms for VAT purposes. 

See Business Brief 13/08.

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Sales of Dogs and Cats

In a VAT Tribunal case, Gables Farm Dogs & Cats Home successfully argued zero rating for the sale of donated animals.  HMRC have published a Business Brief accepting this decision and inviting refund claims of overpaid tax.

See Business Brief 14/08.

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Valuation of Imported Goods

HMRC have relaxed the requirement to produce a valuation declaration for importers.  In the future a declaration of value will only be required on request.

See Business Brief 16/08.

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VAT Tribunal Case - Instamech Limited

In this case the tax payer had not rendered VAT Returns for five VAT quarters including four for the year 2003.  HMRC had raised central assessments in the absence of the Returns, which the appellant had paid.  However in 2007 VAT Returns were submitted showing no tax due which HMRC had accepted.  On this basis the appellant made a refund claim for the assessments already paid claiming that it was tax due.  H.M. Revenue & Customs argued that Section 80 of the VAT Act 1994 applied and the claim was capped under the capping procedure.  The Tribunal agreed with Revenue & Customs and dismissed the appeal. 

See Instamech Limited – Case reference 20596.

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VAT Tribunal Case - Friends of the Elderly

In the case of Friends of the Elderly a lift was installed in a care home on the external walls. The charity argued that the architect’s fees relating to the installation qualified for zero rating on the grounds that the VAT Act 1994, Schedule 8, Group 12, Item 17, allowed for the zero rating of services necessarily performed in the installation of a lift.  The Tribunal agreed with the charity’s submissions and allowed the appeal.

See Friends of the Elderly - Case reference 20597.

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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