Budget Explained: VAT Consultations

accawebmaster —  22 March 2012 — Leave a comment

By ACCA’s budget team

The Budget announced a number of consultations due to begin shortly and cover contentious and often confusing areas of VAT.

This is a quick cantor through the VAT consultations announced in the Budget and a brief look at the current issues being addressed.  A compendium of VAT consultations can be found here.

Hot Food and Premises

This consultation will look at the definition of “hot takeaway food” and “premises”.  Confusion in this area has led to a whole host of litigation within the UK and the European Union.

The proposed legislative changes will have effect from 1 October 2012.

The current legislation can be found at:

Group 1(a) of Schedule 8 to the VAT Act 1994

Sports Nutrition Drinks

There are anomalies between the VAT treatments of Sports drinks, with some being taxed at the standard rate and others at zero.  The consultation will look at treating these as the same and therefore apply one rate of VAT.

The proposed legislative changes will have effect from 1 October 2012.

The current legislation can be found at:

Item 1 of Group 1 of Schedule 8 to the VAT Act 1994

Hairdressers’ Chair Rental

The consultation looks at clarifying that the supply of facilities to a hairdresser is taxable at the standard rate of VAT and bring in legislation apply this treatment.  This is another area of VAT with whole host of litigation.

The proposed legislative changes will have effect from 1 October 2012.

The current legislation can be found at:

Group 1 of Schedule 9 to the VAT Act 1994

Holiday Caravans

The supply of residential caravans in the UK is a zero rated supply.  Larger caravans also receive the same treatment with smaller holiday caravans that can be towed being standard rated.  The consultation will look at the differing treatment of holiday caravans and residential caravans.

The proposed legislative changes will have effect from 1 October 2012.

The current legislation can be found at:

Item 1 of Group 9 of Schedule 8 to the VAT Act 1994

Self Storage

Within the Self Storage industry the VAT rate applied differs from site to site, the consultation is looking to apply a consistent VAT treatment.  Currently rental of a self storage space is an exempt supply unless there is an option to tax in place.

The proposed legislative changes will have effect from 1 October 2012 with anti-forestalling legislation applying to supplies made on or after 21 March 2012.

Details of the anti-forestalling legislative changes can be found here:

The current legislation can be found at:

Group 1 of Schedule 9 to the VAT Act 1994

Approved Alterations to Listed Buildings

This measure will remove the zero rating that applies to approved alterations of protected buildings.  It will narrow the definition when zero rating will apply and will remove the incentive to alter a protected building.

The proposed legislative changes will have effect from 1 October 2012 with transitional arrangements in place for contracts entered into before 21 March 2012.  The anti-forestalling legislation will also apply to supplies made on or after 21 March 2012.

Details of the anti-forestalling legislative changes can be found here.

The current legislation can be found at:

Group 6 of Schedule 8 to the VAT Act 1994

Remember, you can see ACCA’s budget blog from yesterday, here

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