tolley.co.uk/budget14

Transcription

1 BUDGET 2014 Tolley Guidance VAT Free in depth, practical guidance on the Budget For more in-depth analysis on the Budget, visit tolley.co.uk/budget14

2 TOLLEY GUIDANCE What a difference a year makes! Simon Groom, Director of Exam Training & Practical Guidance Simon joined Tolley in 2006 and is now Director of Exam Training & Practical Guidance having previously lead the Tolley Exam Training business for seven years. Prior to joining Tolley he worked for EY as a senior manager in their National Tax Training department with a particular involvement in graduate training. Whilst at EY he was involved in developing the firm s policies with regard to ATT and CTA examinations and in particular, the ADIT qualification. In 2003 he became a member of ATT Council and is now chairman of their member services group. The economic backdrop against which the chancellor delivered his budget had changed quite dramatically from last year and his mood was somewhat more buoyant than 12 months ago. He clearly felt that the economic statistics were on his side and he couldn t resist a few jibes at the opposition benches, some of which they found quite amusing. They particularly liked the quip about the 800th anniversary of the Magna Carta, and King John being a weak leader who betrayed his brother! There were the inevitable sound bites that will undoubtedly provide the media with easy headlines a more resilient pound for a more resilient economy to describe the new pound coin that will apparently be harder to forge, and he couldn t resist getting in the comment about the rich making the biggest contribution to the deficit reduction, which allowed him to use the now well-worn we re all in this together. Judging by the noise from the benches opposite I m not sure everyone agreed. As is always the case these days, budget speeches are not occasions to discuss tax policy and changes in detail, but in amongst the grandstanding and raft of economic statistics he did find time to highlight a few nuggets that are providing the team here with something to chew over as they consider, not just what the rules say, but what they mean for you and your clients, in other words, the what and the so what. The ones that seem to have given most pause for thought are the pension changes and the relaxation of the rules around income drawdown which appear to have generated a fair few comments Mr Osborne said he wanted to trust the people (a big pat on the back for whoever came up with that quote) but the markets clearly think they shouldn t be trusted. As I finish this in the early hours of the morning I can look back at a sterling effort from the Tolley Guidance team in putting all of our notes together so I hope you find them useful. Regards Request your free Tolley Guidance trial Simon Groom Director of Exam Training & Practical Guidance Disclaimer Tolley takes every care when preparing this material. However, no responsibility can be accepted for any losses arising to any person acting or refraining from acting as a result of the material contained in these notes. All rights reserved. No part of these notes may be reproduced or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Tolley. Whilst some of the links in blue within this document resolve to publicly available websites, other links into documents within Tolley Guidance are subscription sensitive. If you do not have a subscription to Tolley Guidance then you can request a free trial tolley.co.uk/budget14

3 Budget 2014 VAT overview Produced by Tolley 19/03/2014 Louise Cracknell, VAT Manager, Tolley Louise has been advising on a variety of VAT matters for over 19 years and currently writes the VAT module for Tolley Guidance. She has worked for HM Revenue & Customs and a number of top 4 accounting practices and spent two years working for PwC in the USA where she advised on a wide variety of international VAT matters. She has also worked in commerce for Siemens and Nortel Networks as an EMEA VAT Manager. This guidance note provides an overview of the VAT changes that were announced by the Chancellor, George Osborne, on 19 March For announcements regarding other indirect taxes please see the Budget 2014 Indirect taxes guidance note for more information. VAT registration and de-registration thresholds With effect from the 1st April 2014 the VAT registration and deregistration thresholds will increase: > > VAT registration threshold will increase to 81,000 > > VAT registration limit for acquisitions of goods from other EU countries will increase to 81,000 > > VAT de-registration threshold will increase to 79,000 Revised place of supply rules and the introduction of the mini one stop shop The government announced in the 2103 Budget that it will be introducing legislation to change the VAT treatment of intra-eu supplies of telecommunication, broadcasting and e-services. With effect from 1 January 2015 these services will be liable to VAT in the country where the customer is located. Businesses who supply these services to private consumers will be required to register in the EU country where the customer receiving the services is located. The Government will also introduce a mini one stop shop (MOSS) that can be used to simplify accounting for VAT on the supplies of these services, and businesses that opt to use the MOSS will only be required to register for VAT in the UK, and VAT due on these supplies will be accounted for using a single VAT return. Please see the New mini One Stop Shop news analysis item and the Hiring goods, telecommunication services and radio and broadcasting services guidance note. Prompt payment discounts Revised legislation will be included in Finance Bill 2014 that will amend UK VAT legislation on prompt payment discounts so that it is aligned with EU legislation with effect from 1 April The legislation will also include powers that will enable the amendment to commence before this date for specified types of supplies. VATA 1994, Sch 6, para 4; 2006/112/EC, Article 79 A Provisional Collection of Taxes Act (PCTA) resolution will also provide statutory effect to the measure from 1 May 2014 for supplies of telecommunications and television and radio broadcasting services, where the supplier is not obliged to issue a tax invoice, in order to protect revenue in advance of the main change coming into effect in 2015.

4 This amendment is intended to ensure that VAT is accounted for on the full amount of consideration paid for goods and services where prompt payment discounts are offered. Currently, UK legislation allows suppliers to account for VAT on the discounted price offered for prompt payment even if that discount is not taken up by the customer. This legislation is being amended in order to bring it into line with the Principal VAT Directive which requires VAT to be accounted for on the consideration actually received from the customer. The Government has announced that it will consult on implementation prior to the 1 April 2015 change coming into effect. Reverse charge for fuel and power The government has announced that it intends to extend the scope of the anti-avoidance reverse charge provisions to cover wholesale supplies of gas and power in order to prevent missing trader intra-community fraud. The changes will result in the customer, rather than the supplier, being required to account for any VAT due on the supply. VATA 1994, Section 1(2); VATA 1994, Section 55A; 2006/112/EC, Article 199a Under EU law EU countries have the right to introduce the reverse charge in relation to supplies which the EU have identified as being at risk of fraud, including wholesale supplies of gas and electricity. The changes will not apply to domestic supplies or to businesses who are not VAT registered or liable to be registered for VAT in the UK. Secondary legislation will be introduced to cover this change and the government has stated that it will discuss the timing of the introduction of the revised legislation with relevant industry bodies. Please see the Missing trader intra-community fraud and MTIC carbon trading guidance notes for information on the current anti-avoidance provisions in operation. Refunds for Health Research Authority and Health Education England The government has already announced in Budget 2013 that they will legislate to include the following bodies in the section 21 VAT refund scheme: > > Health Research Authority > > Health Education England VAT refunds for public bodies The section 33 VAT refund scheme will be amended in order to include Combined Authorities established under existing legislation. The government has also committed to include the London Legacy Development Corporation with effect from Please see the S33 bodies overview and S33 bodies VAT accounting guidance notes for more information on section 33 bodies and refunds. Consultation announced on the zero-rating of vehicles that are adapted for wheelchair use The government has announced that it intends to consult on the possibility of reforming the zero-rating provisions that are applied to vehicles adapted for wheelchair use. It is aiming to better target the scope of the zero-rate in order to reduce fraud and ensure that people with lower limb prosthetics can also benefit from the relief. Legislation will be introduced in a future finance bill once the consultation process has been completed. Please see the Disabled individuals motor vehicles guidance note for more information on the current provisions. Disclosing VAT avoidance The government has announced that it intends to issue a consultation on proposals to improve the VAT Avoidance Disclosure Regulations (VADR) regime. The intention is to align it more closely to the DOTAS regime. The government is considering placing an obligation on the promoter to be the primary discloser of the scheme. Legislation will be introduced in a future finance bill once the consultation process has been completed. Please see the Anti avoidance introduction guidance note for more information on the current anti-avoidance provisions. Data sharing The government has announced that it intends to introduce legislation that will enable it to release non-financial VAT registration data to a small number of parties, such as credit reference agencies, for specific uses such as credit scoring. The government also intends to continue to explore opportunities to release limited VAT registration data to the public. Grant for air ambulance and inland safety boat charities The treasury has recently undertaken a review of the amount of VAT incurred by air ambulance charities on fuel, and as a result, the government has stated that it will introduce a 5-year grant of 65,000 per year for air ambulance charities across the UK. After consultation, the government has also stated that it will introduce a further 5-year grant of 1 million per year for inland safety boat charities across the UK.

5 Further information A copy of Overview of Tax Legislation and Rates 2014 can be found via the following link: HMRC overview of tax legislation and rates 2014 A link to the Budget summary issued by the Treasury can be found via the following link: Budget 2014 For more information on other aspects of today s Budget, see the news articles in other Tolley Guidance modules: > > Budget 2014 Corporate tax overview > > Budget 2014 overview for employers > > Budget 2014 IHT, trusts and estates overview > > Budget 2014 overview for individuals > > Budget 2014 Owner-managed businesses overview

6 TOLLEY GUIDANCE Tolley Guidance is an online service for tax professionals written by a dedicated team of expert tax writers with advice from a team of consultant editors. It is designed to provide you with practical and relevant tax information to help you undertake specific client activities. Tolley Guidance takes you through best practice for a comprehensive range of client issues using a combination of: > > Detailed guidance notes > > Worked examples > > Template documents and checklists > > Bite-sized video lectures > > HMRC manuals and toolkits > > Legislation > > News It enables practitioners to tackle client issues that are outside their normal comfort zone and helps juniors do more fee-earning work without having to rely on constant support from their manager. The structure of the product enables you to hone in on the area that you are working on by clicking through the topic areas or, if preferred, using the search functionality. Tolley Guidance is split into modules that deal with different types of client work. As such you can subscribe to the modules that suit your client base. The modules available are: > > Personal Tax > > Owner-Managed Businesses > > VAT > > Corporate Tax > > IHT, Trusts and Estates > > Employment Tax > > Audit For more information on Tolley Guidance and to sign up for a free trial please visit tolley.co.uk/guidance

7 TOLLEY LIBRARY Tolley Library is the largest reference library of its kind in the UK. Tolley Library has been designed for the UK tax and accountancy market, covering all elements of taxation including both direct and indirect legislation, HMRC materials, cases, detailed tax rates and allowances, news, forms, directories, the Finance Act Handbook, Budget service and detailed commentary on all areas of taxation, as well as offering detailed accounting, audit and business support materials. The aim of Tolley Library is to save you research time, cut costs and boost efficiency, by allowing you to: > > Work more efficiently and find the answers that you need first time with an online search engine that has been built specifically for the tax and accountancy market > > Take advantage of the customisable bookshelf where you can build your own personalised bookcase of must have information and either browse the individual titles or search within one or many of the books on the shelf > > Generate more business, for example, specialist case summaries help users keep track of the advocate general's opinions, enabling them to drive more business by suggesting VAT reclaims to suitable clients > > Save time with instant cross-referencing between commentary, cases, legislation and other legal material > > Stay up to date by setting up customised alerts to advise you when there are updates on specific areas of interest > > Ensure you are fully aware of the latest developments in the areas of taxation that you are most interested in by using the customisable news-pods Tolley Library consists of eight core menus with additional bolt-ons which can be purchased separately or in conjunction with the core menus, enabling you to create a package of material which is most relevant to you and your organisation. For more information on Tolley Library and to sign up for a free trial please visit tolley.co.uk/library

8 TOLLEY LEARNING Tolley Learning provides a unique suite of ground-breaking training products, including: > > Tolley Exam Training One of the UK s leading providers of CTA, ATT, ADIT, ITP and Online Diploma Training. Through a combination of highly experienced tutors, quality training materials and unique online services Tolley Exam Training offers the best study experience available, achieving pass rates that significantly surpass the national average > > Tolley Tax Tutor A clear, focused and concise tax training tool prepared by experts. Tolley Tax Tutor offers online and CD-ROM based courses that provide you with the information and support that you need to maximise your tax expertise with minimum disruption to your schedule > > Tolley VAT Update Quarterly updates on the most important changes in VAT. VAT Update keeps you up-to-date through audiovisual lectures and concise supporting notes that are delivered straight to your desktop For more information on Tolley Learning visit tolley.co.uk/training

9 TOLLEY INSIGHT With access to the leading professionals and personalities in tax, our unrivalled webinars, seminars, magazines & journals are designed for tax professionals covering issues of immediate interest and concern. Tolley Insight includes: > > Magazines and Journals - Taxation, Tax Journal, Tolley s Practical Newsletter Series and Simon s Weekly Tax Intelligence > > Essential Business Skills for Accountants - A series of highly practical webinars with pragmatic advice covering key aspects of essential business development for accountants > > Tolley CPD Seminars - A programme of nationwide CPD Seminars covering the most topical tax issues and led by the UK s best lecturers > > Tolley CPD Seminars Online - An unparalleled resource providing audio-visual lectures that keep you up-to date with the fast moving changes in taxation > > Webinars - A one-hour, live and interactive audio-video broadcast delivered by industry experts offering you a convenient and costeffective ways to meet your CPD requirements > > In-House Specialist Tax courses - Tailored training solutions delivered at a location of your choice. Using the combination of the experience of our conference and course trainers and the specific needs of your organisation, we can deliver a cost effective training solution in a format which best meets your organisational goals For more information on Tolley Insight visit tolley.co.uk/insight

10 The Front Line is where you stand face to face with HMRC and agree tax. It s not a place to be alone. Not a place to go to unprepared. As the UK s only provider of critical tax information, in-depth reference, ground-breaking training and learning resources and unique market insight, Tolley is there by your side with four product families designed for tax professionals working on The Front Line. Tolley Insight Tolley Guidance Tolley Library Tolley Learning Visit tolley.co.uk or call us on Tolley, Lexis House, 30 Farringdon Street, London, EC4A 4HH