Recent Revenue & Customs Briefs on VAT issues

Recent Revenue & Customs Briefs on VAT issues

Finance Leases

HMRC has published Revenue & Customs Brief 37/12 to provide guidance on the impact of the CJEU in the case of EON Aset Menidjimunt. HMRC advise that the decision will have no immediate impact on how finance leases are viewed for VAT purposes in the UK.

HMRC also indicate that there will be no change to the input tax block on cars obtained under a finance lease. This means that only 50% of the VAT incurred when buying a new car using a finance lease will still be unrecoverable by most businesses.

Charges for first time connection of water supplies

HMRC has published Revenue & Customs Brief 40/12 confirming that from 1 January 2013 the first time connection of water pipework will only be zero-rated when it is made by the same supplier as the water supply. If there is no water supply contract in place or the supply is to an industrial customer the supply will be standard rated.

Guidance is also provided in the Revenue & Customs Brief for:

  • Connection of replacement water supplies; and
  • Civil engineering works supplied separately from water.

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