Member Since: 21st Oct 2008
24th May 2019
from Land and Property Liaison Group meeting of 19 September 2018:
"Members noted, that although not technically correct, sub-contractors working on zero or reduced-rate projects often charged VAT at a standard rate to contractors or developers. However, HMRC compliance officers have taken a pragmatic approach on the basis that the tax effect was revenue neutral. It was felt by members that such an approach should be consistently applied. Asking businesses to correct the VAT treatment on historic supplies in such circumstances is time and cost-intensive and merely leads to a ‘money-go round’ between the parties. This often raises no additional tax, but businesses can suffer real cash flow difficulties if any delays in recovering money from any party involved arises. HMRC noted that individual compliance officers have a certain amount of authority in how to deal with certain situations involving VAT in construction supply chains and this was out of the policy team’s control. It was also suggested by BPF that this issue may cease once the new domestic reverse charge on building services comes into effect."
In other words, it's only a few months till the reverse charge change comes in, so we won't bother doing anything about it.
My memory isn't that good, obviously, but it might be worth quoting this in an argument with the VAT man, who appears blind to the 'neutral' argument. It is so blindingly obvious to everyone that it is a waste of time, I just can't contemplate what goes on in their little minds that they want to pursue something like this. I've had two clients thus far, both of whom have had a devil of a job, going back to sub-contractors to rectify it.
24th May 2019
I read something a month or two back, I think, on JVCC minutes, or maybe LPLG minutes, to the effect that HMRC would not be enforcing this pointless exercise. It seems that the news hasn't reached as far as the VAT man who believes it is his own money. (a common complaint) I'll try and find it and post back later.
6th Aug 2018
Of course you could do a covering letter with the VAT application and refer HMRC to paragraph 2.9 of Notice 700/1 as follows:
2.9 If you only supply goods or services abroad
If you’ve got a business establishment in the UK (including a branch or agency) or you usually live in the UK and you only make supplies to customers outside the UK, but those supplies would be taxable if you made them in the UK, you can register for VAT on a voluntary basis. This is as long as you receive taxable supplies from UK VAT registered businesses, or import goods into the UK and you’d be entitled to claim back the VAT on those supplies.
3rd Aug 2018
The following extract from HMRC might assist, or else make it more complicated:
3.4 Imported works of art, antiques and collectors’ items
Certain works of art, antiques and collectors’ items are entitled to a reduced valuation at importation. This is reached by calculating a value for duty using the appropriate duty method, adding any additional costs (see paragraph 3.1) and multiplying the total by 25%. Applying the 20% rate to this value gives an effective VAT rate of 5%.
25th Apr 2018
Sorry to spoil the discussion but I'd tend to disagree as there is limited opportunity to ignore monies received after the registration date. Have a look at VATTOS2355, which says that where a supplier is not VAT registered, the time of supply does not occur until payment has been received (after the reg date in this case). This means that any payments received after the supplier has registered will be liable to VAT, despite the fact that the work may have been performed beforehand. There is an exception for continuous supplies of services, though - explained in the guidance.
1st Mar 2018
OK, thanks for the additional information. Today, however, HMRC state in their internal guidance:
A car is used exclusively for business purposes if it is:
used only for business journeys; and
it is not available for any private use.
The Zone case is interesting and useful to have there should anyone find themselves in a dispute with HMRC. However, HMRC quite often lose cases like this and if they disagree with the decision, they just ignore it. The case was decided in 2016 and it speaks for itself that HMRC still consider that their policy still applies.
1st Mar 2018
HMRC look at whether the vehicle is available for private use, not whether it is actually used privately. That might be more difficult to prove without 'business only' insurance.
2nd Oct 2017
Apologies if this is a dumb question, but I'd be grateful if you could expand on the line about a private library membership being zero rated.
23rd Mar 2016
If the person buying the business is not going to run it, it can't be a TOGC.
22nd Mar 2016
I had this question a few weeks ago and after a bit of research discovered that there were a couple of other cases subsequent to GT Scaffolding, which effectively overturned that case:
R & M Scaffolding and Pharaoh Scaffolding.
It might be worth checking these out, as all three looked at the question of 'possession' passing to the hirer.