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VAT for Charities

Calculating VAT can be an incredibly complicated process for charitable organisations. Therefore, it is no surprise that mistakes are commonly made among charities that fail to recognise they are applicable to many of the same rules as regular businesses. Further to this, The Office of Tax Simplification has initiated a review into the application of VAT with respect to reliefs and exemptions and as a result the House of Commons Treasury Committee has launched an inquiry into tax after coronavirus.

Defining Business/Non-Business Supplies for VAT

HMRC have published a Brief detailing a change in approach with regards to how to determine whether a supply is a business activity for VAT purposes. Supplies made ‘in the course or furtherance of any business’ are subject to VAT, with the appropriate rate out output tax due, subject to other considerations. Consequently, any business supplies made in the UK by a VAT registered person will likely fall within the scope of UK VAT.

One Stop Shop - Northern Ireland

As of 1st July 2021, the existing VATMOSS legislation for digital services was extended to encompass the One Stop Shop. On the withdrawal of EU distance selling threshold simplifications, UK businesses making qualifying sales to EU customers are required to account for VAT at the relevant rate in the country in which the customer is based using the One Stop Shop, without a requirement to register for VAT in each member state in which sales are made.

Duty Deferment Accounts – Guarantee Waiver

On importation of goods into the UK, any relevant customs duties become due immediately at the time of import. If a business holds a Duty Deferment Account this becomes payable on the 15th of the month after the month of import – as a result, importers with a Duty Deferment Account can delay payment of customs duties by an average of 30 days. Import VAT incurred by VAT registered importers after 1st January 2021 will be declared via VAT return under postponed accounting.

A Guide to Alternative Dispute Resolution for VAT Claims

If you are involved in a dispute with HM Revenue & Customs (HMRC) over a VAT payment, the legal process involved can be time-consuming, costly and stressful. Here, the experts at The VAT People will outline the basic details of how ADR works in VAT dispute cases, as well as detailing some of the key benefits we have seen our clients achieve by engaging with this process.

Failure to Notify HMRC of Requirement to Register for UK VAT

In an effort to ensure that all UK businesses with a taxable turnover exceeding the VAT registration threshold are accounting for VAT on relevant supplies in line with their VAT obligations, HMRC have issued letters to those they believe are trading above the threshold but have not yet registered to ascertain whether retrospective action is required.