VAT Registration / Deregistration Threshold

From 1 April 2010 the VAT registration threshold will increase from £68,000 to £70,000 and the deregistration threshold will increase from £66,000 to £68,000.

Changes in Fuel Scale Charges

The scale charges have been updated to reflect changes in fuel prices.  The revised scale charges should be applied to accounting periods starting on or after 1 May 2010.  The revised figures can be found in Budget Notice 44 and Notice 700/64 ‘Motoring Expenses' will be updated by the end of May.

Changes to Zero-rating of Qualifying Aircraft

From 1 September 2010, the definition of aircraft that can be supplied at the zero rate will change from one based on weight and usage to one based on the status of the customer.

Essentially, supplies of aircraft will only be zero-rated where used by airlines operating for reward chiefly on international routes.  Supplies to state institutions will not be affected by the change.

Cost Sharing Exemption

The Government will be working with Charities to consider options for implementing the EU cost sharing exemption.

Postal Services

From 31 January 2011 VAT will be applied at the standard rate to certain postal services provided by the universal service provider (Royal Mail).  Item 4(b) of Group 8 of Schedule 8 to VATA1994 will also be amended to zero rate passenger transport by Royal Mail.

Simplification of Partial Exemption and the Option to Tax Rules

HMRC has announced two changes to simplify the partial exemption de minimis rules and some minor changes to simplify the option to tax legislation.  All changes take effect from 1 April 2010.

Right to Deduct

This measure deals with VAT recovery on immovable property, boats and aircraft where there is private use of the asset.  In addition, it ensures revenue is protected in respect of existing Lennartz accounting arrangements.

VAT Reverse Charge on Emissions Allowances

From 1 November 2010 a reverse charge will be introduced for supplies of emissions allowances.

Place of Supply of Gas, Electricity, Heat and Cooling

This measure implements changes to the place of supply rules for natural gas and electricity.  The rules are to be amended from 1 January 2011 to:

- cover supplies in all types of natural gas pipeline, but they will no longer apply to natural gas in pipelines located outside the EU unless they are linked to EU pipelines;

- provide relief from VAT at importation for all natural gas imported via a network, and

- extend the scope to include heat and cooling supplied through networks.

• latest news
• news archive