VAT accounted for nearly a quarter of all UK tax revenues in 2015/2016; so it’s virtually guaranteed it will remain in place after Brexit (VAT in one form or another being in place for many non-EU countries: Switzerland, Norway, Israel & now even the United Arab Emirates).
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HMRC have made an amendment to ‘Contracted Out Services (COS) Heading 21 – Estate Management Services’ on 12th December 2017.
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The Chancellor has announced a new VAT relief alongside several other relevant statements:
– Scottish Fire and Police services will no longer be liable for VAT, this will take effect from April 2018; bringing them in line with their counterparts around the United Kingdom.
– The VAT registration threshold will remain at £85,000.00 for the next two years, despite suggestions it could be lowered following a report by the Office of Tax Simplification earlier in November
– It was announced that there would be an “Accident Rescue Charities Grant Scheme”, this appears to be an extension to the 2014 Budget where it was confirmed that VAT relief would be granted to search and rescue charities; essentially a grant to help alleviate the VAT incurred.
In relation to the NHS, they have announced that a one-off £2.8bn of additional funding will be made available in the period of 2017-2020. The funding will be released in three tranches to the health service:
– £350m 2017/18 immediate cash injection to help ease winter pressures
– £1,650m 2018/19
– £850m 2019/20
Additionally a £10bn package of capital investment in front-line services will be provided through to the end of parliament; presumably intended to support the STPs [Sustainability and Transformation Plans] that are currently active throughout the NHS.
Interestingly, the government announced that they are increasing the duty on so called ‘white ciders’ due to their low cost and high alcohol content, perhaps this will, indirectly over time have a positive effect on the NHS spend on treating alcohol related diseases such a liver cirrhosis.
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A year on from the release of the interim Lease Car guidance, HMRC have sent out a letter in the last few days to clarify a few points about the application of the simplification measure available in relation to salary sacrifice arrangements for the NHS.
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As a broad overview, the Brockenhurst College Case considered whether supplies of chargeable catering & entertainment could be considered to be ‘closely related’ to the supplies of education being made to students of the college.
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Last week, HMRC released a VAT brief (link below) as a result of the Pennine Care NHS Trust VAT tribunal decision.
READ MORE Following their recent amendment to COS Heading 71, HMRC have re-worded the heading to say that it ‘includes’ inpatients and inmates.
READ MORE Whilst there does not appear to have been an official announcement by them, HMRC have helpfully updated the guidance on COS Heading 14 Computer Services and COS Heading 71 Welfare Services on the online manual late last week. Whilst Heading 71 hasn’t provided much in the way of difficulties over the years, Heading 14 has certainly been an area of uncertainty for many.
READ MORE It is common for new builds to either begin life as extensions / partial build – either becoming full demolition by a gradual erosion of the planning process or due to unforeseen structural weaknesses. Zero rating for new builds hinges on the Demolition Test, a key aspect of the test being that planning consent is in place for the full demolition of any existing structures.
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The DIY refund scheme is intended to reimburse owner occupiers the VAT suffered on materials – and in the case of Conversions – the 5% VAT charged by Contractors.
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