The UK's revenue agency, HM Revenue and Customs (HMRC), has outlined details of the key changes to the value added tax system brought in by the recent Budget. They include an increase in the taxable turnover threshold, an alteration in fuel scale charges, and compulsory online registration.
HMRC publishes 'VAT Notes' on a quarterly basis and after each Budget. Following Chancellor George Osborne's March 23 Budget speech, a Budget Supplement has been produced, containing a summary of the Budget's VAT measures.
Key changes are as follows:
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HMRC publishes 'VAT Notes' on a quarterly basis and after each Budget. Following Chancellor George Osborne's March 23 Budget speech, a Budget Supplement has been produced, containing a summary of the Budget's VAT measures.
Key changes are as follows:
- Increased registration and deregistration thresholds. From April 1, 2011, the taxable turnover threshold, which determines whether a person must be registered for VAT, has increased from GBP70,000 to GBP73,00. In addition, the taxable turnover threshold which determines whether a person may apply for deregistration has increased from GBP68,000 to GBP71,000, and the registration and deregistration limits for relevant acquisitions from other European Union member states has also been increased from GBP70,000 to GBP73,000.
- Changes in VAT fuel scale charges. With effect from May 1, 2011, the VAT fuel scale charges for taxing private use of road fuel have been updated in order to reflect changes in fuel prices. Businesses must use the new scale charges from the start of their next prescribed accounting period beginning on or after this date.
- Legislation will be introduced to give statutory effect to an existing VAT extra statutory concession which affects UK VAT groups with an overseas member that buys services from persons outside the VAT group and uses them to make supplies to the UK members. The government is to hold a technical consultation with stakeholders in May, 2011.
- Legislation will be introduced to add clarity that EU law, relating to the VAT treatment of public bodies supplying goods and services in the capacity of a public authority, is fully incorporated in UK law.
- From August 1, 2012, businesses will be required to register, deregister and notify changes online. From the same date there will be linked changes including removal of the VAT registration threshold for businesses not established in the UK. A consultation document will be issued in June 2011.
- For VAT periods beginning on or after April 1, 2012, the second tranche of existing VAT customers (those registered for VAT before April 1, 2010 with a VAT-exclusive turnover of under GBP100,000), will be required to file their VAT Returns online and make electronic payments. A consultation document will be issued in June 2011.
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Disclaimer: Nothing I say should be taken as tax, legal or financial advice. Anything I say is for general informational purposes only. Always seek independent professional advice.
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Disclaimer: Nothing I say should be taken as tax, legal or financial advice. Anything I say is for general informational purposes only. Always seek independent professional advice.