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VAT registration

Budget 2021 continued the freeze on the registration limit at £85,000 until at least 31 March 2024

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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. (Since 2008 the VAT Act has not referred to the “election to waive exemption”.) The Insight does not cover the exclusions from the OTT or the anti-avoidance rules but does deal with the temporary relaxations to allow for the

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VAT and Budget 2021

The second Covid-19 Budget was never going to be a memorable exercise but rather reflected straightened times. From a VAT point of view, it was not especially kind to smaller businesses and seemed to ignore charities altogether. The following covers both the VAT measures announced by the Chancellor and those published after his speech. Temporary

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VAT Opportunities and Pitfalls for Northern Ireland Businesses Post Brexit

Originally published by Bloomberg TaxReproduced with permission. Published February 22, 2021. Copyright 2021 The Bureau of National Affairs, Inc. 800-372-1033. For further use, please visit: Terry Dockley of Terry Dockley & Co and Una McKearney of CavanaghKelly look at the complex VAT issues which may arise for businesses covered by the Northern Ireland Protocol to

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VAT and Brexit – MOSS, TOMS and OSS

Brexit is not a big deal for suppliers of B2B services – see Part 1 of my earlier VAT and Brexit Insight. For B2C the picture is rather different. Suppliers of B2C services, along with distance sellers of goods, are more likely to face the prospect of multiple VAT registrations. But for Covid-19, the One

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VAT and Brexit – Part 2

The Northern Ireland Protocol presents some unique challenges, not least to the UK’s VAT system. The following is the second part of an Insight that deals with this topic under 5 headings: A          Cross-border supplies of services. B          Exports of goods from Great Britain (“GB”) to the rest of the world, apart from             Northern Ireland

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VAT and Brexit – Part 1

When I started the first draft of this Insight, the House of Lords was debating the second reading of the UK Internal Market Bill. With less than 9 weeks to 1 January 2021 and the end of the UK’s period of transition from membership of the EU, the VAT landscape from 1 January 2021 still

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When must a charity pay VAT on advertising?

One of my more popular VAT insights was one I wrote in 2013 on the scope for charities to buy advertising, and related design and production services, at the zero rate. The Insight included the policy change in Revenue & Customs Brief (“RCB”) 25/10: pay per click adverts have been allowed zero-rating since October 2010,

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HMRC breaks silence on VAT and solicitors’ disbursements

HMRC has published a Brief on the VAT treatment of property search fees charged by solicitors and other conveyancers (Brief 6 2020). The Brief announces the withdrawal with effect from 1 December 2020 of an “informal” concession that since 1991 has enabled solicitors to treat fees for postal searches as disbursements, even though they do

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INSIGHT: The EU 2020 “Quick Fixes” (Part 2)

Originally published by Bloomberg Tax Reproduced with permission. Published February 25, 2020. Copyright  2020 The Bureau of National Affairs, Inc. 800-372-1033. For further use, please visit: In Part 2 of his article, VAT specialist Terry Dockley discusses the the EU “quick fixes” relating to proof of transport and chain transactions. He also outlines what

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FAQs about the “golden brick”

1        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. 2        Why would you use the golden brick? You might use it where: The person buying the

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INSIGHT: The EU 2020 “Quick Fixes” (Part 1)

Originally published by Bloomberg Tax Reproduced with permission. Published February 19, 2020. Copyright  2020 The Bureau of National Affairs, Inc. 800-372-1033. For further use, please visit: In a two-part article, VAT specialist Terry Dockley reviews the EU “quick fixes” which are intended to address four VAT issues. He considers when they will apply, and

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Solicitors, disbursements, VAT

Where can I find the VAT rules on disbursements? The rules governing disbursements are set out in the Principal VAT Directive. While the provisions in question do not appear to have been transposed into UK law, HMRC have set out their views of the conditions that need to be met for treatment as a disbursement

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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 they needed to do something about it. This Insight will provide a broad outline of what those businesses need to do. Getting to grips with MTD has been a salutary exercise for VAT advisers. We are

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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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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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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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Education, training and VAT

VAT exempt education and training – an overview This is one set of VAT rules that causes confusion and there are reliefs that get overlooked. There are three main ways that education and training can be exempt. The first two – private tuition and training by an eligible body – depend on WHO does it.

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