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Margin scheme?
I thought vouchers were vatable on a margin scheme, ie AstraZeneca has to account for VAT on the difference between the purchase and selling price of the Vouchers, and then Argos or whoever accounts for VAT on the face value of the vouchers when they are redeemed.
So if AstraZeneca passed on the vouchers to their employees at cost, there wouldn't be any output VAT even if the supply was a taxable supply?
What am I missing here?
Could be worded better?
"... the salary sacrificed was a supply of services in return for a payment and was therefore subject to VAT."
Could be worded better, perhaps? On a strict reading of this sentence it gives the impression that the supply is being made by the employee to the employer. The employee is presumably not VAT registered and the supply, if VATable, below the compulsory registration threshold. For there to be a VAT charge it would have to be a supply by the employer to the employee, for which the salary sacrificed would the payment in consideration.
With kind regards
Clint Westwood
However...
Post AstraZeneca, HMRC has made it clear that if the employer operates an input tax restriction either via blocking input tax on purchase or restricting input tax on leasing, then no output tax is accountable.
I realise that there are opinions that disgaree with HMRC stated position, but I'm not aware of any recent changes that would prompt Deloitte to raise the spectre again. Smacks of self promotion to me.
Per the article...
The link attached to:
"In new guidance on VAT rules for salary sacrifice schemes HMRC says that the ECJ Astra ruling has wider implications for the VAT treatment of salary sacrifice schemes."
takes us to an HMRC publication dated July 2011. Am I missing something here?