Welcome to the May edition of the VATease Newsletter, this edition covers,
Rover, VAT recovery on Mileage, Private Tuition and EC Sales.
Another HM Revenue & Customs Update
A consultation is underway snappily entitled: "working towards a new
relationship: a consultation on priorities for reducing the administrative
burdens of the tax system on small businesses." The consultation covers a
variety of issues relevant to the new Department, such as time to pay, joint tax
inspections.
In order to get copies of the consultation paper you can contact
smallbusinessunit@hmce.gsi.gov.uk.
The new website is now operational and can be found at
http://www.hmrc.gov.uk
Rover
The task force set up to deal with the problems faced by Rover suppliers
following the failure of the company has been told by the Inland Revenue that
they will defer up to £120 million of bad debt owed by the car maker. So far HM
Customs, (or should we say the Customs section of HMRC??? - answers on a post
card please) have remained quiet on the subject although we do understand talks
have commenced. VATease has also made an approach to the local Debt Management
Unit for the area and we will keep you posted as to the response we receive…
VAT recovery on Mileage
Following our defeat at the European Courts in relation to recovery of VAT on
mileage rates, HM Customs have confirmed that businesses can continue to claim
in this way for the time being.
Private tuition
A company provided private tuition and treated its supplies as VAT exempt. HM
Customs assessed the company for VAT on its supplies finding that it did not
meet the criteria laid down by VATA 1994, (Item 2, Group 6, Schedule 9 of VATA
1994 states that the exemption of private tuition is limited to supplies made by
an individual teacher acting independently of an employer - hence a company
would not meet this criteria). However, the Tribunal observed that EC law does
not actually specify any restrictions on the legal entity of the person
supplying the private tuition. The company therefore won the Appeal.
What a waste!!
Customs officials in Bangladesh investigated a container which was declared
as carrying scrap metal. On inspection, the container was actually found to
house luxury cars, large screen televisions and fridges. So by way of making an
example of them, the Customs officials did no more than organise a public
ceremony at which bulldozers crushed amongst other things a Merc' and a Toyota!
EC sales list
A company appealed against the imposition of a penalty for the non-submission
of an EC sales list. The retired accountant who represented the company suggested
that he was to blame because of his age. However, the Tribunal did not find that
this was a reasonable excuse.
This case provides a reminder to businesses that HM Customs no longer take a
relaxed stance on Intrastat and EC sales list submissions.
If you require further information please contact us on 0121 778 4299.
This newsletter is designed to keep readers abreast of
current developments. No liability is accepted for errors, omissions or opinions
it contains or for any reliance placed on this newsletter. This newsletter is intended
for general guidance only. No responsibility for loss occasioned to any person
acting or refraining from action as a result of any material in this publication
can be accepted by the authors or publishers. On any specific matter, reference
should be made to the appropriate advisor.
© Copyright 2005 VATease Ltd
