23.12.2011

As we approach the end of 2011 we thought we would remind you about a number of VAT changes that take effect from 1 January 2012.

 

On-line Filing of VAT returns

From 1 April 2012, all VAT-registered businesses must submit their VAT returns online and pay their VAT electronically.

The new rules will cover VAT returns filed for accounting periods beginning on or after 1 April 2012.

If you’re not already filing online, you should switch as soon as possible. By doing this, you’ll avoid the last-minute rush, and enjoy the benefits of online filing sooner rather than later. These include:

• an automatic acknowledgement that your return has been received;
• an arithmetic check that makes sure you’re sums are correct; and
• an email to remind you when your next online return is due

 

Salary Sacrifice Arrangements

VAT changes to salary sacrifice schemes are effective from 1 January 2012 and could increase the overall cost of the scheme.

From 1 January 2012 employers providing salary sacrifice schemes must account for VAT on deductions for supplies that are subject to VAT. As childcare is exempt the supply of childcare vouchers will not be affected.

HMRC has confirmed that the change is limited to VAT and there is no change to the tax treatment of the schemes.

Whilst the requirement to account for VAT will result in an additional cost, it does mean that the VAT incurred by the employer will be recoverable in full. Historically, some employers were not able to recover all of the VAT they incurred.

Where salary sacrifice arrangements have been signed or agreed before 27 July 2011 and extend beyond 31 December 2011, organisations will still be able to avoid accounting for VAT on amounts of salary exchanged for taxable benefits. This rule will apply until the earlier of the following:

• the agreement expires or is fulfilled
• an employee’s annual salary/benefits review
• any other situation which affects benefits provided by way of a salary sacrifice

Supplies and purchases of goods in the EU

From 1 January 2012:

• the exemption threshold remains at £250,000 for Dispatches
• the exemptions threshold remains at £600,000 for Arrivals

From 1 April 2012, HMRC will not accept paper Intrastat declarations. You will need to provide your Intrastat declarations online or using electronic formats.

First time connection to gas or electricity mains

From 1 January 2012 the first time connection to electricity or gas mains will be liable to the reduced rate of 5% as long as utilities are for domestic or non-business use.

 

Motor vehicles

From 1 January 2012 the zero-rating of adaptation’s to motor vehicles for disabled people will be withdrawn.

 

Changes to IFA charges

From 1 January 2013 Financial advisers' services to clients could be liable to VAT.  This applies where they are predominantly advisory. 

If you want more information on any of the above changes or any other VAT issues please contact the Scott-Moncrieff VAT Team.

Finally the Scott Moncrieff VAT team would like to wish you all a Merry Christmas and a prosperous new year.