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Making Tax Digital (“MTD”) – what you need to know

Part 2 – what does MTD involve?
My last Insight explained who needed to know about MTD and when th

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Making Tax Digital (“MTD”) – what you need to know

Part 1 – who needs to know and when? If you are an accountant, none of this Insight should be any surprise to you. But are you sure all your clients are equally clued in? I recently had a coffee with a friend of mine who runs his own very successful VAT-registered business. When I

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Ladles and jellyspoons

“Ladles and jellyspoons, I come before you, to stand behind you, To tell you something I know nothing about”.  Origin unknown   With less than 6 months to go … There are now fewer than 6 months before the UK ceases to be part of the EU. Not much is clearer – especially from a

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FAQs about the “golden brick”

What is the “golden brick”? The golden brick is a device for transforming a standard-rated or exempt supply of land or buildings into a zero-rated supply of a partly completed dwelling, or other building qualifying for zero-rating. Why would you use the golden brick? You might use it where: The person buying the property cannot

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HMRC must stop this campaign to restrict zero-rating on new housing

In my December 2017 Insight I drew attention to an unwarranted campaign by HMRC to restrict zero-rating for dwellings by using “the 2(c) test” in a way that was not intended by parliament (when-is-a-house-not-a-dwelling?). In May 2018, in the case of Summit Electrical Installations Limited, the Upper Tribunal confirmed that HMRC’s interpretation of this test

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Not April Fools’ Day

When I came to read the March edition of De Voil VAT Intelligence, I was glad to see it was not 1st April as two of the cases had names that jumped out as less than ordinary. One was Lunar Missions Ltd and the other was Snow Factor Limited. Lunar Missions It turned out that

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Navigating the 5%

Pulled in many directions Last month, I suggested that HMRC’s perspective on whether a charity was engaged in business or non-business activities could be affected by whether the charity either: Wanted zero-rating on a new building; or Wanted to be VAT-registered on the basis that its public funding represented consideration for making a taxable supply.

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Think laterally

More than one way to skin a cat? Recently an enquiry from a client highlighted the importance of thinking laterally in relation to VAT reliefs. The client in question was a farmer who was extending and converting a garage attached to his farmhouse. He was seeking to create a separate dwelling for his parents, who

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When is a house not a dwelling?

“The 2(c) test” The construction of a new house is zero-rated for VAT purposes when the house falls within the statutory definition of a building “designed as a dwelling”. In particular, VAT Act 1994, Schedule 8, Group 5, Note 2(c) means there cannot be zero-rating unless “the separate use, or disposal of the dwelling is

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Building conversions: Upper Tribunal reluctantly upholds the absurd

In September 2013 I outlined the bizarre way that the VAT treatment of building conversions can vary according to how you divide up an existing building. I took the common situation where a builder or developer converts a pub with a first-floor manager’s flat into dwellings, with a view to an onward sale. Assuming the

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Your VAT registration date – a warning

VAT registration and the capital goods scheme The European Court has always held that the VAT system is designed to relieve businesses of the burden of VAT incurred in the course of their economic activities. That includes things they do prior to trading, such as buying assets, including land and buildings (see Rompelman, Case 268/83).

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VAT and the welfare exemption

How much do you know about the VAT welfare exemption? With more and more public bodies outsourcing the provision of welfare services, this question becomes increasingly relevant to an ever wider circle of those advising SMEs and smaller charities. Take a short quiz to test your knowledge. Which of the following would be VAT exempt?

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Pete and the “golden brick”

Pete’s tale Pete bought a pub for £500k to do up and sell on. The vendor had opted to tax but the property included a flat so Pete only paid and recovered VAT on of the price. Within a couple of years he received an offer from a housing association that wanted to knock the

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IFAs and VAT

IFAs and VAT – is one ever relevant to the other? It used to be the case that whenever I met an independent financial adviser (“IFA”), he or she would be keen to tell me that my services were of no relevance to their business whatsoever. Lately I have found that they have some detailed

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The option to tax: FAQs

The option to tax (“OTT”) – some frequently asked questions This Insight seeks to answer a few of the more common questions asked about the OTT. It does not cover the exclusions from the OTT or the anti-avoidance rules. Since 2008 the VAT Act has not referred to the “election to waive exemption”. What is

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Business, charities and VAT

Charities and ‘business’ – why does it matter? How to decide?  Charities often have to decide whether an activity is ‘business’, but why is this an important question, and how do you answer it in a VAT context? Are you in the VAT club? A charity’s activities are not within the scope of VAT unless

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