VAT News

No Deal Brexit - What About VAT?

The Government and HMRC have updated its collection of high-level guides called “partnership packs”, intended to help businesses involved in importing and exporting prepare for changes to customs procedures after 29 March 2019 in the event of a “no deal” scenario.

If the UK exits the EU without a deal, UK businesses will have to apply customs, excise and VAT procedures to goods traded with the EU, in broadly the same way that already applies for goods traded outside of the EU.

VAT and Rental Income

Rental income is classified as exempt for VAT purposes as far as HM Revenue and Customs are concerned. 

For residential property rental income there is no means of being VAT registered.

The position for Commercial Property is different as you have the option to opt to tax a property and this can be done individually per property. 

VAT Registration Limit Continues to be Frozen

The VAT registration limit normally increases in line with inflation each year. However, It was announced last year that the limit would be frozen at £85,000 until 1 April 2020. It has now been announced that the limit will now remain at the same level until 2022. The deregistration limit will remain at £83,000.

Should I Register my Property Business for VAT?

Residential rent income is exempt for VAT so therefore you should not register your property project for VAT.form

Joint and Several Liability for Unpaid VAT

Certain traders can be made liable for the unpaid VAT of another VAT-registered business when you buy or sell specified goods. HMRC have recently updated VAT notice 726 which advises traders to carry out due diligence into their supply chain.

The specified goods are any equipment made or adapted for use as a telephone and any other equipment made or adapted for use in connection with telephones or telecommunication, such as SIM cards.

Making Tax Digital for VAT - Guidance Issued

HMRC have now issued their detailed guidance on the digital record keeping and return requirements for Making Tax Digital (MTD) for VAT. 

VAT Notice 700/22 clarifies that spreadsheets may still be used to keep business records provided that there is bridging software that links to the Government Gateway. 

New VAT Rules for Building Trade in 2019

Under new rules due to come in on 1 October 2019 builders, sub-contractors and other trades associated with the construction industry will have to start using a new method of accounting for VAT.

The measure is designed to combat VAT fraud in the construction sector labour supply chain which HMRC argue presents a significant tax loss. HMRC has now published draft legislation to introduce the Reverse Charge for Construction Services.

Want to Join the Making Tax Digital VAT Pilot?

HMRC have announced that they are looking for suitable businesses to sign up for the pilot testing of the new system of digital reporting of VAT information. Turkeys voting for Christmas springs to mind?

Does Your Accounts System Comply with Making Tax Digital for VAT?

Making Tax Digital (MTD) for VAT is scheduled to start in April 2019 which means that your VAT information needs to be submitted to HMRC digitally.

On 18 December 2017, HMRC published draft legislation together with examples of how the business account records might link with the HMRC computer in order to comply with MTD for VAT. The legislation specifies that “functional compatible software” must be used to record and preserve prescribed VAT related data.

What are Digital records?

VAT Registration Limit Frozen

The VAT registration limit normally increases in line with inflation each year, however the limit has been frozen at £85,000 until 1 April 2020. At the same time, the deregistration limit remains at £83,000.

Pages