Recently released Revenue & Customs Briefs – March 2014

Recently released Revenue & Customs Briefs – March 2014

The following Revenue & Customs Briefs have been released in the past few weeks by HMRC. These include:

  • Definition of word student for VAT liability of construction
  • VAT on buildings that are dwellings and used for a relevant residential purpose
  • Tour Operators Margin Scheme (TOMS)
  • VAT on pension fund management costs
  • Fiscal neutrality and gaming machines
  • Change of HM Revenue & Customs (HMRC) policy following the decision in the case of Goals Soccer Centres plc

These are all notification of important changes for the relevant trade sectors.

Definition of word student for VAT liability of construction

HMRC has published Revenue & Customs Brief 3/14: Definition of word student for VAT liability of construction.

This Revenue & Customs Brief “… has been produced in order to clarify the definition of the term ‘student’, which is significant when considering the VAT liability of construction works to buildings which are ‘used for a relevant residential purpose’.” The Revenue & Customs Brief contains the revised guidance, which is in HMRC’s manual on Construction (VCONST) at paragraph VCONST15360.

VAT on buildings that are dwellings and used for a relevant residential purpose

HMRC has published Revenue & Customs Brief 4/14: VAT on buildings that are dwellings and used for a relevant residential purpose. This Revenue & Customs Brief announces the publication of [Information Sheet 2/14][infosheet1] which is covered in the Information Sheet section below.

Tour Operators Margin Scheme (TOMS) – position following European Court of Justice (ECJ) infraction decisions

HMRC has published Revenue & Customs Brief 5/14: Tour Operators Margin Scheme (TOMS) – position following European Court of Justice (ECJ) infraction decisions. HMRC says:

“… after careful consideration, we have decided that there will be no changes to the operation of TOMS in the UK at this stage, and that businesses should continue to follow existing guidance. This is because:

  • the EU Commission has indicated an intention to carry out a review of TOMS, which may result in significant changes to the scheme in future
  • making changes now, which may be modified or reversed in future, would be particularly disruptive and costly for business”

VAT: CJEU judgment regarding deduction of VAT on pension fund management costs

HMRC has published Revenue & Customs Brief 6/14: VAT: CJEU judgment regarding deduction of VAT on pension fund management costs setting out its position on the deduction of VAT by an employer on the costs of administration of its employees’ pensions and management of the funds assets. The Revenue & Customs Brief sets out HMRC’s policy on the recovery of VAT on such costs.

HMRC invites claims for the recovery of unclaimed VAT and sets out the basis on which it will entertain claims. Claims need to be sent to a team set up for the purpose. The email address and address of the team are included in the Revenue & Customs Brief.

VAT: fiscal neutrality and gaming machines – HMRC action following the decision of the Court of Appeal in the case of The Rank Group plc

HMRC published Revenue & Customs Brief 1/14 on 23 January 2014 advising that they would be seeking to recover any amounts paid to businesses that submitted claims earlier in the course of the litigation in this case now that the Court of Appeal decision has gone against Rank.

VAT: Change of HM Revenue & Customs (HMRC) policy following the decision in the case of Goals Soccer Centres plc [2012] UKFTT 576 (TC)

HMRC has published Revenue & Customs Brief 8/14: Change of HM Revenue & Customs (HMRC) policy following the decision in the case of Goals Soccer Centres plc [2012] UKFTT 576 (TC).

In this case the First-tier Tribunal found that there were two supplies. One of a supply of land that was exempt if the conditions for exemption were met. The other a supply of administration services. HMRC has accepted the First-tier Tribunal’s findings and amended its policy accordingly. HMRC has this to say about accounting for VAT:

‘Where a single price is charged to the customer, businesses will need to determine the value of the two different supplies to establish the correct amount of VAT due. Whatever method is adopted to do this, there must be sufficient documentary evidence kept to show how a business has arrived at a fair and reasonable apportionment. Paragraph 8.1 of the VAT Notice 700 – The VAT Guide gives more information. The business will also need to consider how much of the VAT it incurs is deductible, see Chapter 3, VAT Notice 706 – Partial Exemption.’

Got a question on any of the above? Leave a comment or get in touch with me.

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