Expert Updates / VAT and Indirect Tax

In the 2012 Autumn Statement, the Chancellor of the Exchequer confirmed plans (first announced in September 2012) to use of the public procurement process to deter tax avoidance and evasion. A discussion document and draft guidance for consultation followed in February 2013 and on 20 March 2013, in the 2013 Budget report, the government confirmed that the new policy would be introduced from 1 April 2013.

In The Royal College of Paediatricians the FTT held that the sale of a property subject to an agreement for lease was a TOGC even though completion of that agreement was conditional upon exchange of contracts for the sale.

Michael Wistow, Head of Tax, shares his thoughts on how this Budget is likely to be received in the City, if it will create a simpler UK tax code and highlights some of the more disappointing aspects of the announcements.

Apart from the leak the big headlines were a drop in the main corporation tax rate, new and improved reliefs to support SMEs and entrepreneurs, measures to help the UK investment management industry, a new tax regime for shale gas, a boost for investment in housing and infrastructure and some unexpected inheritance tax restrictions.

Central Government will be able to ban companies and individuals that have taken part in failed avoidance schemes from being awarded Government contracts. The rules concern all major suppliers to central Government, including defence, IT, building and infrastructure companies. Other public bodies will be encouraged to consider applying the rules. The far-reaching proposals are open for an unreasonably short consultation period ending 28 February.

Following the recent ECJ case of Field Fisher Waterhouse (FFW) it looks likely that the VAT treatment of service charges paid under most leases will continue to depend upon whether the landlord has opted to tax the property. If a landlord has not opted to tax the property but wants to charge VAT on the service charge it should consider using a separate management company to supply the services.

HMRC’s long-held view is that a lease grant cannot be a transfer of a going concern (TOGC) because it involves creating a new asset rather than transferring an existing one. However, in Robinson Family Limited v HMRC the First-tier tribunal held that granting an “overriding” lease of a “let” property should be treated as a TOGC. This will have [...]

A round-up of the main tax announcements in today’s Budget. Click on a link below to read more on our blog about a particular measure. Click here to listen to a podcast discussing whether today’s Budget will help the UK tax system meet the goals of simplicity, predictability, fairness and supporting work. GAAR to be introduced with a [...]

A zero rate of VAT is available for certain alterations to protected buildings but possibly not for much longer. These are usually listed residential buildings or certain buildings used for charitable and residential purposes. A consultation document entitled “VAT: Addressing borderline anomalies” has been issued to launch a consultation about abolishing the zero rating with [...]

A relatively innocuous sounding consultation document “VAT: addressing borderline anomalies” will, in fact, have wide-ranging implications for the tax treatment of the self storage industry. Currently, self storage facilities only attract VAT where the operator has exercised their option to charge VAT on the storage space to their customers. If the operator elects not to [...]