The 2023 Autumn Statement confirmed a number of the rumoured personal and business tax changes, but announcements in the Indirect Tax sphere were limited. Our team highlight some of the main changes and how these will impact our clients.
General VAT Changes
Women’s Sanitary Products
The zero rate on Women’s Sanitary Products will be extended from Jan 24 to include period underwear.
This is a welcome announcement for campaigners that have sought to bring VAT charged on period underwear in line with other items, which are zero-rated.
Whilst this appears to be good news, manufacturers and retail outlets have been heavily criticised because in many cases the full VAT saving is not being passed on to customers, and the burden of a VAT charge on such products disproportionately falls on those with lower incomes.
Private Hire Vehicles – Consultation
The Government will open a consultation to consider the VAT treatment of private hire vehicles (e.g. taxis) resulting from the high-profile Uber case which considered how VAT is charged on cab fares in London. The subsequent Uber Britannia Ltd v Sefton MBC ruling stated that the decision has wider application.
Private hire operators outside of London will be carefully following the consultation as any decision by HMRC to apply the ruling will mean increased charges to customers.
Good and Bad news on Duty….
Finally, alcohol duties are frozen until 1 August 2024, but will immediately increase for all tobacco products by RPI+2%, and hand-rolling tobacco by RPI+12%.
These changes strengthen the Government’s commitment to reduce instances of smoking, especially in younger people, but many think the changes don’t go far enough to deal with the impact of alcohol consumption on the wider economy.
Please reach out to your VAT consultant or email us at VAT@bbvat.co.uk to discuss the implications of these announcements further.