I have been involved in VAT for over 25 years and have worked for some of the top firms in the UK and also had a spell working in New Zealand. I advise small and medium businesses and accountancy practices and have particular experience in education, charities, international supplies and partial exemption. I am based in the beautiful county of Norfolk.
Just wondering, if the customers are local authorities, they most definitely can reclaim the VAT, and so may accept a VAT only invoice, with no effective time limit as the 4 years starts from the VAT only invoice date.
The tree example is indeed nonsense. The infamous Fiscal Themepark is alive and well in the HMRC parallel universe!
Good article Marie
Somewhat mean spirited of HMRC to refuse in these circumstances
Great article as ever Neil. I don't think it will be that long before those teas and coffees and the 24 hr delegate rate will cease to be partly exempt once HMRC turn their mind to it.
Had a case a while ago about a music festival that charged pitch fees for catering. Just the space but HMRC argued that it was a licence to trade and taxable, and I think they would win this at tribunal. Without you facilitating the overall event, advertising etc, there would be no catering.
The same applies to in house shops, e.g Debenhams type arrangements.
A changing VAT world!
Good article Les
If this interpretation is true, and especially if HMRC appeal and lose, one observation is that the VAT planning being sold by certain big advisors to standard rate welfare services by deliberately NOT being state regulated may not be effective. The supplies may be exempt from VAT anyway.
New staff needed
Let's be honest, what HMRC needs is a different type of workforce for a modern age. Their offices AND staff are stuck in the 70's. I talked recently to an officer from the City where I was at an LVO and was staggered that she is still there, as I left about 30 years ago!
A new workforce can handle and process data better, be more focused on tax and not the retirement cheque or that 4pm (at the latest) finish time. In order to do this, HMRC needs to start again with new better offices better technology. Nothing will get rid of old wood faster than asking them to travel.
This MIGHT work for HMRC, but only with proper handling ad focus. It might also be the biggest disaster ever!!
Will be fun seeing what happens.
I'm an ex VAT officer and so can imagine how cheesed off they are. However, we all know that many many tax officers are not that effective in tax collection and are just seeing out their days until retirement - there have been countless opportunities to join the private sector and those who remained must have been aware this was on the cards.
It mirrors what happened with the large accountancy firms, who also used to be everywhere and who are now in regional hubs. The large firms also use regional hubs and sometimes overseas ones to prepare tax returns and CT comps and so it would be a bit odd if the profession moaned about this too much.
I really fear for the public service element though
Turkeys voting for Christmas
No self respecting tax advisors body should have the temerity to suggest simplifying the rules!
So, it is proposed that all 28 member states vote to change a law all 28 agreed to in 2008 before changing a law again in 2 years time? Is it just me that thinks this is Fantasy Island stuff? The EU has one way of working. The Commission proposes and the countries vote. They will only do this when they have fully considered the issue.
One topic that no one talks about is how much revenue the MS that don't start with an L and end in a G are receiving as additional VAT revenue that they were not getting in 2014, from just Amazon, Apple and Microsoft, never mind anyone else. This number is THE significant issue for Treasury departments but may also make them more agreeable to a threshold, as the rest of the world seems to be doing.
Fully supportive of the threshold by the way. I was one of the first in July/Aug 2014 to highlight this. But I am cynical that the Commission is paying lip service and indicating things it cannot deliver,ie actual vote in changes, quickly.
The decision this week by France to LOWER the distance selling threshold to EUR 35,000 gives a clue where they think the rules are going
Yet another example of HMRC bullying taxpayers.
The next time my tax code is wrong in their favour, can I levy a penalty against HMRC?