Welcome to our last VAT update of 2021, we cover some of the latest changes in VAT and updated notices from HMRC. If you'd like to discuss how the below changes might affect your organisation, call our technical team on 01858 565142 who have the knowledge and expertise to advise you.
Changes to VAT following the Autumn Budget
Most of the changes have been in the pipeline for some time but have been included as part of the Autumn Budget package. There have been no changes made to the VAT registration and de-registration threshold, they have remained the same as follows:
VAT Registration: £85,000
VAT De-registration: £83,000
Implementation of VAT rules in free zones
The legislation will be introduced in the Finance Bill 2021-22 to amend the Value Added Tax Act 1994. The changes ensure the goods that have benefitted from zero-rated supply in a free zone, and have not been sold to a customer outside the free zone within a time limit, are subject to VAT.
This measure will affect VAT registered businesses authorised to operate in the customs site (free zone) of a Freeport.
Click here to read more about the Autumn Budget Changes
Swimming Tuition Case
“The CJEU recently published its Judgement regarding whether ‘swimming tuition’ fell within the concept of school or university education for the purposes of the VAT exemption.
Surprisingly, the CJEU held that ‘swimming tuition’ did not fall within the exemption. The reason why I say this is surprising is because swimming tuition provided privately in the UK has traditionally been accepted by HMRC as being exempt from VAT.
It will be interesting to see whether HMRC takes notice of this Judgement and whether they decide to revise their guidance.
However, given that CJEU Judgements are no longer binding on UK Courts/Tribunals, HMRC may instead choose to keep their current policy in place.”
VAT Exemption: Supply of consultants and GP specialists
Mainpay Limited (Mainpay) appealed against the decision of the First Tier Tribunal on 29th April 2020. The question at issue in the appeal is whether Mainpay is supplying medical care within the meaning of Group 7 schedule 9 VAT Act 1994, so that its supplies are exempt from VAT or whether it is making a standard rated supply of staff.
To read HMRC’s Notice updates, visit: https://www.gov.uk/topic/business-tax/vat
To discuss the updates, contact our team of VAT experts, who are available to answer your questions and support you with implementing any changes following updates in VAT legislation and case Law.
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