Recent and upcoming changes in VAT

Ben Chaplin

December 15 2015

There have been a number of changes that affect VAT, either through changes to legislation or Tribunal cases. We have tried to list the most recent and relevant ones below:  
  1. France to lower distance selling VAT threshold to €35,000
From 1 January 2016, France will reduce their distance selling threshold from €100,000 to €35,000. Therefore, if you trade over the internet through eBay, Amazon etc, you will need to keep an eye on how much you sell to France. If you go over €35,000 (about £25,300) net of VAT, you will need to register for VAT in France  
  1. Revenue & Customs Brief 19/2015: VAT update on supplies of sporting services by non-profit making bodies
Following the recent ruling in Bridport and West Dorset Golf Club, HMRC issued a brief to amend their guidance regarding exemption of supplies to non-members. In a nutshell, the green fees that were charged at standard rate to non-members should have been charged as exempt. This has resulted in HMRC receiving a number of repayment claims. They have recently issued this brief to say that they will restrict the amount of claims although the amount of VAT to be claimed back is still before the courts. This has had an effect on all other exempt supplies made by non-profit making bodies in that the VAT treatment for non-members should be the same as members.  
  1. SI 2015/1949 The Value Added Tax (Caravans) Order 2015
This is an amendment to the existing legislation which includes updated safety measures  
  1. SI 2015/1978 The Value Added Tax (Amendment) Regulations 2015
Following a recent CJEU decision, from 1st January 2016 UK businesses will not be entitled to include supplies made by their foreign branches in their VAT partial exemption calculations. Businesses need to implement this from the beginning of their next partial exemption year. In summary, if your business makes taxable and exempt supplies, you can only use supplies made in the UK Company in your partial exemption calculations.  
  1. Public Notice 723A: Refunds of VAT in the European Community for EC and non-EC businesses
This is a replacement to the old Notice 723A and includes changes made in EU Directive 2008/9. In summary, the Notice explains the schemes for claiming a refund of VAT incurred in either the EU if you are established in another Member State or the UK if you are established outside the EU  
  1. Revenue & Customs Commissioners v Associated Newspapers Ltd [2015] UKUT 641 (TCC)
This case was surrounding the provision of vouchers to customers free of charge as part of a business promotion scheme. Associated Newspapers Ltd were issuing vouchers in their papers and not declaring VAT to HMRC. They were reclaiming VAT on the costs related to the vouchers. The Commissioners ruled that VAT was due and issued an assessment. Both the First Tier and the Upper Tribunal ruled that output tax was not due on the deemed supply of the vouchers as it was not a taxable supply. This ruling led to input tax on the costs of the vouchers to be disallowed.  
  1. TC04762: French Education Property Trust Ltd v HMRC [2015] UKFTT 620 (TC)
This case was a building intended for use solely for relevant charitable purpose. French Education intended to lease the building to a second charity with the intention that the second charity use the building as a fee-paying school and issued a zero-rated certificate. HMRC argued that this gave rise to economic activity and disallowed the certificate. French Education appealed the assessment, which was dismissed by the Tribunal.        

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