Important information re VAT Online Service

HMRC's VAT online service will be unavailable from 7am on Monday 4th April to 6am on Wednesday 6 April and taxpayers will be unable to submit VAT returns, set up direct debits or view their accounts online during this period.

HMRC has advised that if a return is filed a day or two late due to an inability to access online systems they will adopt a 'light touch' approach with regard to penalties. However, we would strongly advise that where an online VAT return has a due date of 7 April, the returns should be submitted before 4 April to ensure that the due date is met.

2011 Budget

There were no major announcements regarding VAT in this week's Budget. However, there were some changes and these are detailed in our Budget Focus newsletter at http://www.ukvatadvice.com/images/stories/newsletters/110323cvcbudgetfocus.pdf

Change to Low Value Consignment Relief may be imminent

The government has signalled that it may be about to announce a change to the VAT low-value consignment relief in the forthcoming Budget. The LVCR relieves goods up to a value of £18 from import VAT.

The Commercial Secretary to the Treasury, Lord Sassoon said in the House of Lords that his ministerial colleagues and HMRC officials are now examining what can be done to reduce tax loss in this difficult and technical area. He went on to say:

‘…we are actively reviewing the operation of this relief. Ministers hope to be in a position to announce any possible changes to the operation of LVCR flowing from the review in the Budget on 23 March’

Read more in our latest newsletter at http://www.ukvatadvice.com/images/stories/newsletters/110317cvcnews.pdf

Hot food case-successful appeal

Deliverance Ltd is a catering company. Amongst the foods they deliver to customers are items such as spring rolls and samosas, which are freshly cooked and leave the premises above ambient air temperature. HMRC argued successfully before the First Tier Tribunal that because the food was supplied hot it should be standard rated. Deliverance appealed to the Upper Tribunal, who agreed that the earlier Tribunal had not applied the hot food test correctly and that the purpose of demonstrating that the food was freshly cooked and the purpose of enabling the food to be consumed hot were conceptually different. The taxpayer’s appeal was therefore allowed.

Read about this and more in our latest newsletter at http://www.ukvatadvice.com/images/stories/newsletters/110303cvcnews.pdf