5 Major Indirect Tax Developments in the UK

5 Major Indirect Tax Developments in the UK

Highlights

• April 1, 2022
• Implementation of Plastic Tax
• Extension of Making Tax Digital to all UK VAT registered businesses from April 2022
• End of temporary reduced rate for leisure and hospitality
• Policy paper Spring Statement 2022; 0% VAT on Energy Saving Materials & Delay implementation of penalty reform by 9 months to January 2023
• UK consultation on potential new online sales tax
• HMRC Guidance: Check if you need to notify HMRC about an uncertain tax treatment
• HMRC internal manual: Uncertain Tax Treatments by Large Businesses Manual

Other recently posted newsitems on the UK

Brexit

• After Brexit: Triangulation & Call Off Stock
• Boris Johnson hints at further delay of post-Brexit EU import checks
• Brexit onslaught deepens as a third of all UK firms exporting to EU simply vanish due to red tape knockout
• HMRC Collection: Webinars about border requirements and moving goods between Great Britain and the EU
• Letters to businesses about importing and exporting goods between Great Britain and the EU
• UK Brexit VAT and duties refunds on Inward Processing

Customs

• HMRC Guidance: Community, Common Transit and TIR newsletters
• HMRC Guidance: Guidance Manually arrive your goods in the UK
• HMRC Guidance: Launch of new services for guarantee checking and New Computerised Transit System (NCTS) availability for traders
• HMRC Guidance: Tariffs on goods imported into the UK
• HMRC Guidance: UK trade agreements with non-EU countries
• HMRC Policy paper Revenue and Customs Brief 7 (2022): claiming a repayment of overpaid import VAT on the importation of dental prostheses into the UK
• Importation of aircraft-whether within EU customs special procedure when entered UK-impact of expired end use authorisation
• Imports of textiles and footwear from China – Large-scale and systematic fraud – Organised crime – Judgment
• Liability for duty and any penalty will fall to the importer If an import declaration is wrongly made to Importers Knowledge
• Press release UK and US resolve steel and aluminium tariffs issue
• UK Parliamentary committee calls for development of UK Carbon Border policy
• UK Publishes Finance Act 2022: Measures to reform the UK’s Tonnage Tax regime
• United States and UK reach tariff agreement on steel products under Section 232
• USTR announces 232 tariff agreement with the United Kingdom, reinstates some China Section 301 product exclusions
• VAT and Customs Duty: how compliant are you?

Deduction

• FTT: No input tax recovery for supplies made by an associated company that had not paid the output tax
• FTT: Restriction of deduction of input tax under the “Kittel” or “Fini” principles
• Hippodrome Casino: floorspace-based override appropriate for casino – FTT
• When might VAT be recoverable in connection with selling shares in the UK?
• Y4 Express Ltd – Upper Tribunal decides that input VAT on postage payments was not recoverable

ECJ Customs

• UK owes EU over undervalued Chinese goods, says ECJ

E-Commerce

• Corrections to VAT distance-selling rules
• HMRC Guidance Completing a One Stop Shop VAT Return
• HMRC Guidance Sending parcels to and from Northern Ireland
• HMRC Policy paper: Value Added Tax (Enforcement Related to Distance Selling and Miscellaneous Amendments) Regulations 2022
• Non-UK suppliers of services to UK consumers

Electric vehicles

• Electric Vehicles: What to keep in mind?

Energy/environment

• Energy-saving materials guidance
• Energy Saving Materials – What is changing?
• Five proactive steps to prepare for expected carbon measures
• HMRC Guidance: Climate Change Levy rates
• HMRC Guidance: Energy-saving materials and heating equipment (VAT Notice 708/6)
• HMRC Policy paper: The Value Added Tax (Installation of Energy-Saving Materials) Order 2022
• New VAT Fuel Scale Charges from 1 May 2022
• Rishi Sunak urged to cut VAT on fuel as drivers are hit by record prices
• VAT treatment Changes to the installation of Energy Saving Materials

Excise

• Fuel duty cut by 5p per litre for a year, VAT on household green energy equipment like solar panels and heat pumps is scrapped for 5Y
• HMRC Guidance: Biofuels and other fuel substitutes (Excise Notice 179e) from 1 April 2022

Exemption

• FTT: Partial exemption – Recovery of residual input tax
• Taxpayer victory leads to room hire VAT exemption
• VAT & Partial Exemption – Ability to adjust for Covid Impact

Fraud

• FTT: Whether Ablessio principle only applicable to party committing VAT fraud itself
• Official Statistics: VAT gap estimates – VAT Gap of ￡8.6bn
• Peers debate tax gap – VAT gap in the spotlight

Import of Goods

• ATA Carnet for temporary import to the UK
• ECJ – UK undervalued imports from China 2011 to 2017

Late payment interest

• HMRC late payment interest rates to be revised after Bank of England increases base rate

Legislation

• HMRC Collection Customs, VAT and Excise UK transition legislation from 1 January 2021

Liability to pay VAT

• Not VAT registered? – Don’t forget Reverse Charges when checking your VAT threshold

Making Tax Digital

• Addressing the challenges of MTD for VAT
• HMRC Guidance: Help and support for Making Tax Digital
• HMRC Guidance: Making Tax Digital for Business — stakeholder communications pack
• HMRC Policy paper: Making Tax Digital
• HMRC Research and analysis: MTD – additional VAT revenue of approximately ￡185m
• HMRC: VAT records for Making Tax Digital
• Making Tax Digital for VAT – Expansion
• Making Tax Digital for VAT – extra revenue calculated
• Non-compliance risk for “laggards” as MTD for VAT lands
• Phase Three of Making Tax Digital for VAT
• Research proves MTD increases tax revenue, says HMRC
• The UK is making VAT digital – MTD reaches its next milestone
• United Kingdom to Mandate Electronic VAT Through Making Tax Digital (MTD)

Margin scheme

• VAT margin schemes

Online Sales Tax

• Consultation on Online Sales Tax released
• Exploring the pros and cons of an online sales tax
• Majority of retailers in UK back online sales tax
• Online sales tax: A new tax for the digital age?
• UK consultation on potential new online sales tax
• UK Government Considers Case For New Online Sales Tax

Other

• Authorising a Tax Agent: HMRC introduce new Form 64-8 requirement
• Crime doesn’t pay……..VAT. Is there tax on illegal activities?
• Five operational UK VAT updates affecting systems, data, processes and controls
• HMRC Guidance: Agent Update: issue 94
• HMRC Guidance: Health professionals and pharmaceutical products (VAT Notice 701/57)
• HMRC Guidance: Motoring expenses (VAT Notice 700/64)
• HMRC internal manual: Insurance Premium Tax
• HMRC Policy paper: Revenue and Customs Brief 6 (2022): Lennartz mechanism and VAT accounting
• HMRC provides some clarity on VAT treatment of termination and compensation payments
• Indirect Tax Considerations For US Businesses Trading With The UK
• Ministry of Finance postpones the obligation to integrate payment card accepting devices with cash registers
• Motoring costs – A guide
• Official Statistics Value Added Tax (VAT) annual statistics
• Overwhelming political resistance to GST idea in Guernsey
• Planning Permission and VAT: The Devil is in the Detail

Penalty

• Avoiding a Default Surcharge. Reasonable Excuse – Update
• FTT: Mitigation of penalty
• HMRC Guidance: Compliance checks: penalties for VAT and excise wrongdoing – CC/FS12
• HMRC Guidance: Default surcharge (VAT Notice 700/50)

Place of supply

• Matchmaking services were subject to special place of supply rule for B2C consultancy services

Plastic Tax

• Ask the expert: What does the new Plastic Packaging Tax mean for businesses?
• HMRC Collection: Plastic Packaging Tax – Registrations are open as of April 1, 2022
• HMRC Guidance: Completing your Plastic Packaging Tax return
• HMRC Guidance: Decide if you need to register for Plastic Packaging Tax
• HMRC Guidance: Examples of tests and calculations for Plastic Packaging Tax
• HMRC Guidance: How to work out the weight of packaging for Plastic Packaging Tax
• HMRC Guidance: Plastic Packaging Tax force of law guidance
• HMRC Guidance: Register a group of companies for Plastic Packaging Tax
• HMRC webinars on Plastic Tax
• HMRC: Guidance Plastic Packaging Tax: steps to take
• Plastic packaging tax – could you be liable to someone else’s tax bill?
• Plastic Packaging Tax (PPT) – Effective from 1 April 2022
• Plastic Packaging Tax UK – in force from 1 April 2022
• Plastic Packaging Tax: all you need to know before April
• UK Plastic Packaging Tax – are you ready?
• UK Tax Authority issues further guidance on UK Plastic Packaging Tax

Postponed VAT Accounting

• Access Issues to Postponed VAT Accounting (PVA) Statements
• HMRC Guidance: Get your postponed import VAT statement

Rate

• Chancellor rejects calls to remove VAT from defibrillators
• Climate think tank E3G suggests cutting VAT on insulation
• FTT: VATA 1994, section 73 – food and drink for take-away, eat-in, and deliveries
• FTT: Zero rating – General item no. 1 of Group 1 Schedule 8 VATA – confectionery – cakes – flapjacks
• Government rejects calls to cut VAT at public electric car charge points
• UK 20% tourism & hospitality VAT rate returns 1st Apr 2022

Reform

• Policy paper Spring Statement 2022; 0% VAT on Energy Saving Materials & Delay implementation of penalty reform by 9 months to January 2023
• Policy paper: Changes to the VAT treatment of the installation of Energy Saving Materials in in Great Britain
• Rishi Sunak’s Spring statement today: From fuel duty cuts to tax and energy bills
• Spring Statement 2022: VAT
• Spring statement 2022: VAT relief for ESMs will be extended from April 2022, including a time-limited zero rate for the installation

Refund

• End Customers Can No Longer Address Claims for Overcharged VAT to HMRC, United Kingdom Says
• FTT: Claim for repayment of VAT wrongly paid
• HMRC blocks third-party VAT refund claims
• HMRC Guidance: Prepare for the second-hand motor vehicle export refund scheme
• HMRC tax refunds taking longer than usual
• How non business income affects VAT recovery
• Revenue & Customs Brief 7 (2022): Claiming a repayment of overpaid import VAT on dental prostheses
• Way2VAT launches galaxy-first ‘smart’ VAT/GST-savvy Mastercard

Reporting

• Form: Tell HMRC about an option to tax land and buildings
• HMRC calls on businesses to get ready to move to customs IT platform over the summer

Risk management framework

• HMRC enquiries: Why a strong tax risk management framework is critical for businesses
• HMRC Guidance: Check if you need to notify HMRC about an uncertain tax treatment

Taxable amount

• VAT Implications of Transfer Pricing – Valuation
• What is consideration and why is it important?

Taxable person

• Revised guidance on VAT grouping applications
• UK HMRC Publishes Revised guidance on dealing with VAT grouping registration
• Upper Tribunal rules on VAT grouping conditions
• VAT Grouping: Latest from HMRC
• What to do while you are waiting for a response to your VAT grouping registration (Notice 700/2)

Taxable transaction

• Option to Tax – Belated Notification issues
• Overseas university’s services outside scope of VAT

Uncertain Tax Treatment

• HMRC internal manual: Uncertain Tax Treatments by Large Businesses Manual
• UK HMRC Provides Guidance on Uncertain Tax Treatment Requirements
• UK HMRC Releases Updated Guidance on Reporting of Uncertain Tax Positions

VAT Registration

• HMRC internal manual VAT Registration
• HMRC Policy paper Revenue and Customs Brief 5 (2022): revised guidance on dealing with VAT grouping registration

War in Ukraine

• HMRC Guidance: Taking humanitarian aid out of Great Britain to support Ukraine
• HMRC Press release: UK announces new economic sanctions against Russia
• VAT costs for “Concert for Ukraine” tickets donated to Charity Appeal

Previous issues

• Feb 2022: 5 Major Indirect Tax Developments in the UK
• Dec 2021: 5 Major Indirect Tax Developments in the UK