ANSWER TO QUESTION 4 (VAT AND OTHER INDIRECT TAXES) Part Draft Letter to Stephen Feeny From: Chris Harries ABC Chartered Tax Advisers To: Mark Denver ABC Chartered Tax Advisers Subject Leisure Complex Date: 7 May 05 Mark Please find attached my draft letter to Stephen Feeny for your review as requested. Regards Chris Draft letter Mr Stephen Feeny Wuffing Leisure Holdings Ltd Nowton NT9 XX ABC Chartered Tax Advisers Hightown NN DG 7 May 05 Dear Mr Feeny Leisure Complex Thank you for your letter dated 8 April 05. I am writing with the advice you requested. We held a meeting on 4th May to discuss other issues, and as agreed we will write to you separately about these matters shortly. Terms of Reference This advice has been prepared on the basis of your letter dated 8 April 05, further correspondence you have forwarded to me and the discussions at our meeting on 4 May 05. Executive Summary You have requested advice about various issues arising from the proposed development of the Leisure World complex. We recommend that you opt to tax your interest in the hotel (if not already done) and the retail units, but not the casino. We suggest that we carry out a detailed review in order to maximise VAT recovery for the casino through a bespoke partial exemption method. We advise that VAT recovery for costs incurred through your UK branch might be restricted. We have considered the VAT and direct tax implications of the termination payment and concluded that the after tax cost falls within your budget. You should file a further SDLT return and will have,000 of SDLT to pay. Finally, we have advised on a new share issue to Liam Fry to incentivise his performance.
) General VAT Implications I would firstly like to explain the terms partial exemption and VAT recovery. The business will make a mix of taxable supplies, which are supplies subject to VAT (e.g. hotel accommodation), supplies exempt from VAT (gaming supplies from the casino and possibly conference room hire by the hotel) and the granting of concessions, which may be taxable or exempt as discussed later. Thus its VAT position is known as partially exempt' and the overall VAT recovery for general expenditure incurred by the business is calculated according to a mechanism called a partial exemption method. mark The approach to VAT recovery under partial exemption is known as attribution. Where VAT is incurred which relates exclusively to taxable supplies, for example supply of hotel rooms, it is recoverable in full. Where it relates exclusively to exempt supplies, for example gaming, it is not recoverable. Where it does not relate exclusively to either taxable or exempt supplies, the VAT is recoverable in accordance with a formula such as the ratio of taxable supplies to total supplies made by the business. mark The owner of an interest in land may make an election known as the 'option to tax'. The effect would be as follows: VAT would be chargeable on lease rentals charged to units at Leisure World (the letting of land would otherwise be exempt), VAT would need to be charged on any future lease or sale of the land for at least the next 0 years, Input VAT would be recoverable for any construction work and other supplies relating to those leases. The ability to claim back the VAT would be the primary reason for opting to tax. Assuming you decide to opt to tax before you have granted the leases, you should ensure that the leases include a clause specifying that the landlord has the right to charge VAT, otherwise the amount charged will be deemed to be the VAT inclusive amount, thus reducing the after tax amount of rent received. marks The casino is owner operated, so it is not rented to a third party. I would recommend not to opt to tax the casino; the supplies made therein are principally exempt and the option would not affect the liability. VAT could not be recovered for construction costs which relate to the gambling areas of the casino, with or without an election. However, if the option were made and the casino were to be sold at a later date, then VAT would need to be charged if the sale were made within a 0 year period (the minimum time for which the option will apply), which in turn may create VAT recovery problems for the purchaser. mark You will charge lease rentals to the shops, restaurants and bars and to the cinema owner. These will be exempt supplies, unless you elect to opt to tax. I would strongly recommend you to do so as soon as possible, otherwise there will be a restriction in the amount of VAT recoverable on construction work, as it will be deemed to be attributable to the exempt supplies of letting. Given that all the retail units (shops, bars and restaurants) will be part of a fully enclosed concourse, the option to tax will extend to all these units, which are deemed to be one single building for the purpose of the legislation. For the cinema, a separate election will be needed. marks The charge of the incentive management fee to all the retail outlets is a taxable supply of services because it represents contingent rent arising on a lease, for which the option to tax has been made. Thus VAT at the standard rate must be charged. mark On acquiring the share capital of Abbot Hotel Ltd, the due diligence work should have ascertained whether the option to tax has been made in respect of the hotel premises. (Alternatively this information can be obtained by an approach to HM Revenue & Customs) This is important because the hire of a meeting room / conference facilities for a function organised by
a third party is regarded as exempt supply, notwithstanding that catering may be offered as part of an inclusive charge. In the absence of the option to tax, the room hire will be an exempt supply. Although no VAT would be charged to the conference organiser, the incidence of exempt supplies will reduce the amount of VAT that may be recoverable on the refurbishment work. Thus if the option has not already been made I would strongly advise you to do so as soon as possible. There is unlikely to be any disadvantage from opting to tax. marks ) Supplies by the Casino and the Group The supplies made from the casino will be as follows: Roulette, blackjack and poker. These supplies are exempt from VAT, but subject to gaming duty. Slot machines (fruit and quiz machines). These supplies are exempt, but subject to machine games duty. Bar sales and snacks - standard rated. marks To arrive at the VAT return figures for the casino operations, the value of the exempt supplies will be the full amount of the stakes or takings, less only the money paid out in winnings or, if the prizes are goods, their cost to the business, including VAT. Gaming duty payable is not deductible from the turnover. mark I understand that the registration of your VAT group has taken place. The VAT registration number covers all VAT group members. Group VAT registration is a facilitation method which allows two or more corporate bodies to be treated as a single taxable person. One of the companies applying for group treatment is nominated as the representative member and the registration is then made in the name of that member. As a consequence of group registration, any supply of goods or services by a member of the group to another member of the group is disregarded for VAT purposes. Ordinarily this means that VAT need not be accounted for on these supplies. Where a company supplies services to its own foreign branch, this amounts to a transaction within the same legal entity, and thus it follows that it should be ignored for VAT purposes. This is because the branch does not carry out any business in its own right and does not bear any business risk. Without these factors, the necessary legal relationship between supplier and recipient does not exist for a supply to take place. mark This was the prevailing understanding of VAT law until a decision was released by the Court of Justice of the European Union in September 04 known as 'Skandia America Corp'. The litigation concerned supplies from a US company to its branch in Sweden, where the branch formed part of a partially exempt Swedish VAT group. It was ruled that the supply was made to the VAT group, which does carry out a business, rather than to the branch. As such, the supply was within the scope of VAT. marks When an EC company buys services from a supplier outside the EC, there is no VAT charged by the overseas supplier. The purchaser, however, must account for VAT under what is known as the 'reverse charge' mechanism. It charges itself VAT and recovers the tax to the extent it is used in making taxable supplies. Thus for a VAT group that is partially exempt, full VAT recovery will not be achieved. marks The Skandia case seemed likely to bring about an additional VAT cost from this arrangement. However HM Revenue & Customs released Revenue & Customs Brief /05 in February 05 to clarify the position. The brief highlights the difference between VAT grouping rules in Sweden and VAT grouping rules in the UK. Under Swedish VAT law, the branch established in Sweden becomes part of the VAT group, but not the whole body corporate i.e. the overseas company and 3
its branch or branches. Thus there is a supply from outside the VAT group to the VAT group. Under UK VAT law, the whole body corporate becomes a member of the VAT group. Thus there is no change to UK VAT grouping rules as a result of the Skandia case. Supplies are deemed to remain as transactions within the same taxable person. So the supplies in this instance are disregarded for VAT purposes and thus no additional VAT cost arises. marks Note that there is currently anti-avoidance legislation in UK VAT law which covers a similar scenario. This is where a company resident outside the EC is supplied with services at zero VAT cost before being acquired and incorporated into a UK VAT group. In this case the onward supply of these services within the VAT group are not disregarded for VAT purposes and thus the intended VAT advantage does not accrue. mark Finally, I should note that HMRC has recently issued revised guidance on VAT incurred by holding companies. If the holding company has no trading activity as such, then it will not be able to recover the VAT it incurs on purchases unless it makes properly calculated management charges to its subsidiaries. However, it seems that the property, casino and hotel companies will each procure services directly, so the policy change should not be an issue. mark [NOTE: Candidates are not expected to have knowledge of case law reported less than three months before the examination date. Consequently candidates who do not consider R&C Brief /05 will not be penalised. Full credit will be given to candidates who consider R&C Brief 37/04 and note the possible additional VAT cost that might arise.] 3) Partial exemption As I noted above, a calculation of the amount of VAT which is neither directly attributable to taxable supplies nor to exempt supplies is needed. Assuming you take my advice about opting to tax, this calculation is only relevant for the casino. As the casino operates in a markedly different way from the other types of business, it could be treated as a separate sector for partial exemption purposes. mark It is then necessary to ascertain the most appropriate way of apportioning the residual input tax incurred between taxable and exempt supplies. The need is for a calculation which shows how input tax is used within the business. A method known as the standard method calculates the VAT recoverable using the fraction of taxable supplies over total supplies (both taxable and exempt). However, this may not be appropriate for all businesses, given the varying circumstances which may apply. Instead a bespoke or 'special' partial exemption method may be more appropriate, which would use different factors other than turnover to perform the calculation. Some alternative methods of apportionment are number of transactions, staff time or numbers, floor area, or cost allocations. marks In the context of a casino, the use of turnover may not be appropriate. This is because more costs are incurred in earning each pound of catering income than each pound of gaming income. Secondly, a turnover based method would produce unpredictably fluctuating results depending on the luck of the customers, whereas the underlying costs would not vary. mark I would be happy to perform an analysis of your business model to consider an appropriate method of apportionment; for a casino with catering, a floor based method has been known to produce an acceptable result. However it would not be possible to recommend any particular method without a detailed review of the figures. mark It is necessary to get a written agreement from HMRC for the use of a special method, who will normally approve it, provided it is fair and reasonable. The taxpayer must make a declaration to the effect that, to the best of his knowledge and belief, the method fairly and reasonably represents the extent to which goods or services are used by it in making taxable supplies. mark 4
4) Capital Goods Scheme The expenditure (before VAT) to be incurred on the hotel refurbishment and the construction of the casino, cinema and retail units will each be in excess of a minimum figure of 50,000. Thus each building and the hotel refurbishment will all be regarded as 'capital items' to be monitored under rules known as the capital goods scheme (CGS). mark For each item it is necessary to look at the use to which the asset is put over a 0 year period in order to determine its correct VAT recovery. For example, the letting of a building subject to the option to tax will have a 00% taxable use, whilst the exempt letting of a building, in the absence of the option to tax, will have 0% taxable use. Where the use of that asset changes over the period, an adjustment to the original VAT recovered is required, comparing the use in the initial period to later years. mark The UK branch will incur expenditure on procuring IT equipment, which will be recharged to Wuffing Casinos Ltd. The CGS also applies to any items of computer equipment for which the expenditure (before VAT) is not less than 50,000. Such items also need to be monitored under the capital goods scheme (but over a five year period) in a similar fashion to expenditure on land and buildings. mark 5) Capital allowances Capital expenditure and depreciation are not deductible for tax purposes. Instead, businesses may obtain tax relief on certain capital assets in the form of capital allowances the tax equivalent of depreciation. Thus the company will wish to claim the maximum amount of capital allowances to which it is entitled. The type of capital expenditure that may qualify for capital allowances goes well beyond straightforward items such as tables, chairs and guest room furniture. The type of expenditure on which a hotel or casino business may claim capital allowances include: room fixtures; water heating and air ventilation systems; cleaning equipment; kitchen fixtures; electrical and cold water systems; burglar alarm systems; computer equipment and software; lifts and escalators; swimming pools and leisure facilities; advertising hoardings; conference and function room fixtures; sound insulation; public spaces; technology upgrades. marks Tax relief is obtained as a writing down allowance (WDA), where items of a similar classification are pooled together and given an annual rate of relief on a reducing balance basis. Those items that are defined as being integral features of a building, such as water, heating, air ventilation, electrical systems and lifts, obtain an 8% WDA. Assets qualifying for capital allowances that are not integral features obtain relief at 8%. mark The Annual Investment Allowance (AIA) enables businesses to obtain 00% relief for expenditure of up to 500,000 and can be applied to the majority of expenditure that qualifies for capital allowances. The 500,000 annual allowance only applies until 3 December 05, after which it will revert to the old annual allowance of 5,000. mark 5
It is also possible to obtain 00% relief where capital expenditure is incurred on certain energy saving and environmentally beneficial assets, which may be of interest to hotels when upgrading their fixtures and fittings. This applies where expenditure relates to new assets included in the government s Energy Technology List or Water Technology List, available on the DECC and DEFRA websites respectively. mark There should also be fixture claims on the hotel which was acquired when the company bought the share capital of Abbot Hotel Ltd. The acquired company is likely to have fixtures claims within its own tax computations which will continue under the new group structure. It would be worthwhile reviewing which fixtures the company has claimed and whether there are any fixtures which have yet to be identified for capital allowance purposes. There is no time limit on claiming capital allowances so any fixtures which are yet to be claimed could now be claimed. The new pooling rules which took effect from April 04 will not be in point as it is the share capital of the company that has changed hands rather than the asset. Any newly identified fixtures will not be eligible for the AIA as their addition date would have been in a previous year. mark [Credit given if students discuss that some of the refurbishment of the hotel could be genuine repairs and deductible from trading profits.] 6) Compensation payment for early termination There was no clause permitting a right to terminate included in the management agreement, and separate negotiations were needed to agree a compensation figure. Thus the hotel chain has permitted a variation of contract rights, which is a supply for VAT purposes, by the hotel chain to Wuffing Hotel Ltd. In a decided VAT tribunal case on similar facts, Croydon Hotel & Leisure Ltd (LON/93/06A), the tribunal found that the termination payment did represent a supply for VAT purposes - one of restoring the hotel to the owner unencumbered by the presence of the hotel chain. The amount of million paid by Wuffing Hotel Ltd to the hotel chain will be the VAT inclusive amount, in the absence of any other provision made in the termination agreement. You will need the hotel chain to issue a tax invoice for this amount. 3 marks Treating the compensation payment as a revenue expense will give immediate corporation tax relief. However, HM Revenue & Customs (HMRC) might say that the management agreement is a capital asset because it regulates the whole conduct of the company's trading operations, restricting the company's freedom to trade and obtaining the benefit of the hotel chain's name, connections and goodwill, and therefore the payment to terminate it is capital expenditure which cannot be set off against taxable profits. marks The alternative argument is that the termination payment made by Wuffing Hotel Ltd may be seen as a payment to remove an obstacle to more successful and profitable trading without producing an enduring effect on your capital and without achieving the disposal of a capital asset and should be treated as a revenue expense. Thus I would advise it may be treated as a revenue payment. marks The VAT inclusive payment made was,000,000. After deduction of input tax, which would only be possible following receipt of a valid tax invoice, the net cost would be 5/6 x,000,000 =,666,667. The after tax cost of the expense, calculated at the main corporation tax rate of %, is,666,667 x 79/00 =,36,667. This figure falls below your budgeted figure of.5 million. marks 7) Landfill Tax Landfill tax is payable by a landfill site operator to HMRC as a result of a disposal of material as waste by way of landfill at a licensed landfill site. It is usual for the landfill site operator to pass on the tax paid to its customers. mark 6
The words in italics above, disposal of material as waste, is the key issue here. If waste material is intended to be re-used rather than disposed of as waste, then tax will not be due. However, following a high profile court case in 008, the legislation was tightened up the following year to ensure that certain activities were subject to tax. mark Under the rules introduced in 009, where material is used to create a temporary haul road, the disposal will be taxable where the road haul does not have engineered features such as kerbs or drains. Conversely, where material is used for the construction of permanent site roads, then the disposal will be non-taxable. These will have engineered features such as kerbs or drains and a surface that is prepared and/or finished. Permanent site roads are likely to have been constructed prior to the start of tipping operations on the site. marks The position is similar for the use of materials to create a temporary hard standing. Where material is used for the construction of a base on which activities such as waste recycling or treatment take place, the disposal will be taxable where the bases do not have engineered features such as sealed drainage. Conversely, where material is used for the construction of a permanent hard standing, typically having engineered features such as sealed drainage and having a surface that is prepared and/or finished, the disposal will be non-taxable. Permanent hard standing is likely to have been constructed prior to the start of tipping operations on the site. marks We will need to refer back to the landfill site operator to ascertain the facts. It is possible that the material was used in the construction of the new site, in which case tax, which would amount to 80,000, would not be due. There is also the possibility that some of the construction material would have been classified as inactive/inert and might have benefited from the lower rate of landfill tax of.50 per tonne. You may also wish to take legal advice to ascertain whether Wuffing Leisure Holdings Ltd is indeed contractually liable to pay the tax in these circumstances. mark 8) SDLT For SDLT purposes, there is an initial assumption that a contingency will be satisfied. Thus the rate of SDLT due would be 4% based on the full consideration of 550,000. Thus SDLT at 4% on 350,000 ( 4,000) was payable on the initial SDLT return. However, if planning permission for only 8 units is achieved the consideration will only be 500,000 and the duty would be payable at the rate of only 3% ( 5,000 in total). mark The purchaser of the land can apply to defer payment of tax if the contingent consideration falls to be paid on one or more future dates, at least one of which is more than 6 months after completion. I assume that this was done, given your colleague's comments. mark The amount of the final consideration depends on uncertain future events. In this case, SDLT can be paid on the basis of a reasonable estimate of the value of the uncertain consideration. Thus I would advise you to file a further SDLT return and pay additional tax of,000. This should be done within 30 days of the payment date. mark When the final value of the consideration becomes known, the tax payable can be adjusted up or down. If an underpayment has occurred, interest will be due, running from 30 days from the due date of payment to the seller on 5 May. mark 9) New class of shares Wuffing Hotel Ltd could issue preference shares to Mr Fry. Those shares have preferential rights to dividends (ahead of ordinary shares), but they usually only entitle the holder to a repayment of 7
capital on a winding up, so they are not entitled to share in a surplus on a winding up as well. They typically have no or limited voting rights. mark Convertible shares or deferred shares usually confer few rights initially but, subject to the attainment of certain targets, such as achieving a pre-determined level of profitability, they can convert into ordinary shares. At that point they will usually rank equally with the ordinary shares and will acquire value (for example rights to capital income and votes) at a future stage. marks The company can, of course, attach different rights (for example as to voting, capital and dividends) to different classes of share. mark Providing an automatic right to dividends through preferential shares may provide reward in advance of achievement. My recommendation would be to issue convertible shares linked to the performance of the hotel, but to vary the class rights of those shares to restrict voting rights and limit return of capital on winding up to the amount subscribed, i.e. not share in any surplus. mark You need to be aware that the company's Articles of Association must permit different classes of shares and that a resolution incidental to the creation of a new class of shares must be passed and delivered to the Registrar of Companies. mark [Comments on tax implications to be inserted by direct tax team] I trust this advice is suitable for your purposes. If you would like any further clarification or assistance with any of the issues, for example notification of the option to tax or negotiation of a partial exemption special method, please do not hesitate to contact me. Yours sincerely Mark Denver Partner Total for this part of the question 63 marks 8
Part Briefing notes for Mark Denver Mark I am sending you my notes as requested by your e-mail of 4 May. Loyalty Card Programme Firstly, it is important to distinguish between the in-house supplies and those made through the external outlets. The fees charged by Wuffing Leisure Holdings Ltd (WLH) for the issue of points by external outlets is a taxable supply on which VAT must be charged. mark There is a taxable supply by the external outlets when redeeming reward goods and services because the outlets receive consideration for doing so from WLH. In accordance with the judgement in HMRC v Aimia Coalition Loyalty UK Ltd (03 UKSC 4) the payment by WLH is consideration for a supply of redemption services (plus VAT) by the retail outlets to WLH. mark The Supreme Court reasoned that VAT should be chargeable on Aimia's taxable supplies only after deduction of the VAT borne by Aimia's necessary costs. This included the cost of securing that goods and services were provided to loyalty card holders in exchange for their points, i.e. the payments made by Aimia to the redeemers, so that it accounted for VAT only on the added value for which it was responsible. This was the economic reality of the arrangements entered into. mark However, the advice to be given to the client needs to be tempered by the fact that HMRC have yet to issue any guidance, in the form of a Revenue & Customs Brief or otherwise, which demonstrate their acceptance of these principles to other taxpayers. Loyalty schemes can be quite diverse in nature and HMRC might attempt to restrict the Court's decision to the facts of individual taxpayer. mark When loyalty card holders earn points for purchases at the in-house outlets (the casino and the hotel) these are not transactions within the scope of VAT because the points have no monetary value. When the card holders redeem their points for reward goods / services, no additional consideration is tendered by the card holders, so again there is no transaction to report on the company's VAT return. Only the amount of consideration actually received by the hotel / casino is the amount on which VAT is required to be accounted for, if any. Thus the loyalty card scheme has no bearing on the level of exempt supplies made at the casino. marks VAT registration I understand that the client is in possession of valid tax invoices, and thus is entitled to recover the input tax incurred, on the assumption that the registration of Gedding Construction Ltd is valid. An overseas trader must register for VAT if he makes taxable supplies of goods and services in the UK in the course or furtherance of his business. From December 0, the UK registration threshold no longer applies to businesses with no establishment in the UK. Instead they have been required to register if they make any taxable supplies in the UK (para. Sch A VATA 994). mark However, s. 8 VATA 994 overrides the above provision. It provides that if a person ("A") who does not belong in UK supplies services to a business ("B") which does belong in the UK, the Act has effect as if B had made the supplies to itself (and A had not made the supply). This is the "reverse charge" procedure. Thus any supplies made by an overseas person which are subject to the reverse charge are excluded from the requirement to register by an overseas person. marks 9
I note the comment in Stephen Feeny's letter that Richard Noakes was based in an office at the site for the duration of the contract. However, I do not consider that this temporary presence would constitute having a fixed establishment in the UK. If this were the case, then Gedding Construction Ltd would belong in the UK and be entitled to register here. However, case law intimates that there needs to be a sufficient level of human and technical resources and a degree of permanence for this to be deemed to be a fixed establishment. mark s. 9 VATA 994 considers the place of belonging of the taxpayer. If a taxpayer has a business establishment or other fixed establishment in more than one country, the relevant establishment for registration purposes would be the one most directly concerned with the supply. mark The reason there is a problem is that the place of supply rules state that for land related services, the place of supply is where the land is situated. Construction is a land related service and thus will be subject to the reverse charge. mark My conclusion is that the VAT registration is not valid. It seems likely that HMRC will cancel the registration, perhaps retrospectively. mark Any forthcoming assessment from HMRC would be for failure to account for output tax under the reverse charge mechanism. Such an assessment would appear to be correct and would have to be paid. I would advise a review of the contract and contacting the supplier immediately to request a credit note and re-issued invoices without VAT. However, it would also be advisable to discuss the position with HMRC. You should note that the output VAT has been paid by Wuffing Hotels Ltd to the supplier, who presumably have declared it, and that the input tax was recovered in good faith. Acting openly and transparently with HMRC will minimise the possibility of a penalty being charged, although interest would probably be due. marks I trust these notes are sufficient for your purposes. Please let me know if you need further details. Regards Chris Harries Tax Manager Total for this part of the question 5 marks 0
Overall mark allocation The marks are allocated as follows: Part Part Presentation Total VAT 35 5 50 Direct Taxes 0 LFT 6 0 6 SDLT 4 0 4 Law 7 0 7 Presentation 63 5 00
SUGGESTED MARKING GUIDE TOPIC MARKS General VAT implications Basics of partial exemption Effect of option to tax OTT for casino OTT for retail units / rule for enclosed concourse Incentive management fee OTT for hotel 0 Supplies by the casino and the group Liability of casino supplies Valuation of casino supplies No supply between parent and branch (FCE Bank) Skandia America Corp decision Supply to VAT group not branch Explain reverse charge and restricted VAT recovery for partially exempt VAT group R&C Brief /5; distinction between Swedish and UK VAT group rules, no additional VAT cost Section 43 (A) rules VAT recovery for holding companies Partial exemption Sectorised method Standard and special methods Specific factors for a casino Suggestion for floor based method Administrative aspects 6
Capital goods scheme Definition Adjustment for change of use Rules for IT equipment 3 Capital allowances Types of expenditure eligible for allowances Rates of WDA: 8% and 8% Annual investment allowance 00% allowances for energy saving assets Claim for allowances on fixtures within the hotel 6 Termination payment Compensation = supply for VAT purposes Amount paid is VAT inclusive Whether revenue or capital expense Argument for capital Argument for revenue Conclusion and recommendation Computations for budgetary purposes 9 Landfill Tax Disposal of material as waste Waste Recycling Group case / law change Temporary road haul - taxable and non taxable disposals Temporary hard standing - taxable and non taxable disposals Legal advice on contractual liability to pay 7 3
SDLT Calculation of duty payable Conditions for deferral of tax Advice on future filing Adjustment when final consideration known 4 New share class Characteristics of preference shares Characteristics of convertible shares Special class rights Recommendation Articles / resolution 6 Loyalty card programme Points issued is taxable supply Redeemer makes redemption service to scheme promoter Input tax recoverable by promoter Lack of guidance from HMRC In-house supplies not within VAT return figures 6 VAT registration Registration rule for overseas trader Reverse charge / interaction with registration rules Fixed establishment rules Place of belonging rules Place of supply rules for land Conclusion on registration Advice on future action 9 Presentation and higher skills Total 00 4