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Deeks VAT News

Deeks VAT News
Keeping you up to date on VAT changes

Issue 9                                     7 June 2020

 Welcome to Deeks VAT News

In this week’s issue we look at the following areas:

  • Reverse Charge for the Construction Industry – Delayed again, now due to start on 1 March 2021
  • Change in the VAT treatment of solicitors postal search fees
  • Export time limit extension – a relaxation during the pandemic
  • Andrew Fuller [2020] – another DIY builders claim
  • Opting to tax land and buildings – extension of time limit to notify HMRC

Revenue and Customs Brief 7 (2020): domestic reverse charge for the construction services – delay in implementation

As expected and due to the pandemic, the reverse charge for the construction industry has been delayed again. It should have come into play on 1 October 2020, but is now due to start on 1 March 2021. The brief below also details an amendment to the original legislation.  End users and intermediary suppliers will be required to inform suppliers where they want to be excluded from the reverse charge.

Please see the business brief :

https://www.gov.uk/government/publications/revenue-and-customs-brief-7-2020-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation/revenue-and-customs-brief-7-2020-domestic-reverse-charge-vat-for-construction-services-delay-in-implementation

Revenue and Customs Brief 6 (2020): VAT treatment of property search fees charged by solicitors and conveyancers

Historically and by way of a concession, HMRC allowed solicitors to treat postal search fees as disbursements and outside the scope of VAT even though they did not fully meet the disbursement criteria. Following the Brabners case, this concession will be removed from 1 December 2020. All search fees will now be treated as standard rate and part of the supply of services.

Please see the business brief :

https://www.gov.uk/government/publications/revenue-and-customs-brief-6-2020-vat-treatment-of-property-search-fees-charged-by-solicitors-and-conveyancers

Export time limit extension – a relaxation during the pandemic

The export staff manual has been amended to allow taxpayers to apply for a waiver of the requirement to remove the goods within 3 months of the supply being made. The waiver is on a case by case basis, which is fine if the clients have a dedicated officer, but otherwise the application would have to be made via the VAT Enquiries team.

This is little known, and potentially unpublicised, relaxation during the pandemic

If taxpayers are experiencing difficulties in exporting (e.g. the person handling the transport arrangements is ill due to COVID–19 or suspected COVID–19 and there is no replacement person, or the transportation is not available etc.), the taxpayer can apply to HMRC to waive the 3 month condition.

HMRC  will normally lay down some conditions (e.g. goods must be exported within 1 month of the end of the Government restrictions being lifted) and the taxpayer must keep a copy of the waiver.

You can find details in the HMRC internal manual – VAT Export and Removal of Goods from the UK.

Andrew Fuller [2020] another DIY builders claim

Another DIY Builders claim rejected by HMRC as out of time, but on appeal allowed as building project not completed until amended planning permission issued.

Download the decision as a PDF from the First Tier Tribunal website.

Opting to tax land and buildings – extension of time limit to notify HMRC

Once an option to tax has been made, it must be notified to HMRC within 30 days. However, this has been relaxed due to covid 19 and where a decision is made to opt to tax a property between 15 February 2020 and 30 June 2020, the time limit to notify HMRC is 90 days. 

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