This month our VAT News covers a range of developments from Spring 2010. Please scroll down to read each of the short news updates below.

Registration and de-registration threshold
With effect from 1 April 2010 the VAT registration threshold will increase to £70,000. This means if you receive taxable income in excess of £70,000 in any 12 month period, then you must register for VAT.

The de-registration threshold has increased to £68,000. If you are VAT registered and your income is below £68,000 you can consider de-registering.

For more information on VAT registration and de-registration please feel free to contact one of our VAT team, who can advise it is suitable for your business.

Fuel scale charges
The fuel scale charge rates have been updated. Using the fuel scale charge entitles you to recover the VAT you incur on fuel. This may or may not be beneficial, so if you have any questions please contact one of our VAT team.

Click here to sign up for the latest tax alerts & publications  

Charities sharing costs
HMRC has recognised that the current rules for Charities that share costs can be unfair.  Consequently, HMRC intends to implement the EU cost sharing exemption that benefits charities that will share the same premises for example.  For further information on whether this benefits your charity please contact one of the VAT team.

 

Lennartz
HMRC has provided new guidance in relation to Lennartz accounting.  The scope to use Lennartz is becoming limited, so if you have a building that you use for a “non business” purpose it may be worth considering whether you can take advantage of Lennartz.  Any member of our VAT team would be happy to discuss whether Lennartz would apply to you, but we would suggest you act urgently before the scheme is removed.

Partial exemption and option to tax rules simplified
Changes have been made to the partial exemption de-minimis rules, and also the option to tax legislation, to ease administration.  Our VAT team can provide further clarification on updates.

Postal services
Postal services provided by the Royal Mail were treated as exempt for VAT purposes.  Following a court case, changes will be made to the rules making some of the supplies taxable.  Consequently, there is scope to submit a claim to HMRC for overpaid or under claimed VAT incurred on the services you have received on postal services.  If your business uses the services of the Royal Mail this opportunity could be beneficial for you.

Charities constructing or buying buildings
VAT legislation will come into force on 1 July 2010 that will reduce the scope for Charities to obtain zero-rating on the purchase of, or work undertaking on buildings.  If you are a Charity that intends to purchase a building which you will use for non-business charitable use, or will significantly refurbish a building you already own, please contact the VAT team to find out whether you can benefit from zero-rating before the rules change.

Miscellaneous VAT changes
HMRC announced changes to zero-rating of qualifying aircraft, the place of supply of gas, electricity, heat and cooling, and the reverse charge for emissions allowances.  We do not expect most of these changes affect most businesses, but we would be happy to discuss them if you think it affects your business.

If you would like more information on this please contact our VAT partner Scott Craig in the first instance. Please feel free to contact the Scott Moncrieff VAT Team if you would like to discuss this or any other VAT issues:

Edinburgh
Scott Craig: scott.craig@scott-moncrieff.com
Alan Glen: alan.glen@scott-moncrieff.com
Iain Masterton: iain.masterton@scott-moncrieff.com
Tel: 0131 475 3500

Glasgow
Greg McNally: greg.mcnally@scott-moncrieff.com
Anthony Cochrane: anthony.cochrane@scott-moncrieff.com
Tel: 0141 567 4500