VAT update August 2018

In this month’s update we report on HMRC’s revised guidance on the VAT cost share exemption, HMRC’s consultation and plans to address VAT avoidance via offshore looping, and making tax digital for VAT.

News

Revenue and Customs Brief 10 – HMRC publishes its policy on the cost share exemption

On 31 July 2018, HMRC published “Revenue and Customs Brief 10 (2018): VAT – cost share exemption”. The Brief explains HMRC’s revised policy for identifying supplies made by costs sharing groups (CSGs). The revised guidance, which is set out in paragraphs CSE3850 to CSE3895 of the Cost Sharing Exemption (CSE) Manual, is due to take effect from 15 August 2018. Read more.

HMRC addresses offshore looping VAT avoidance

On 19 July 2018, HMRC published a consultation on draft legislation intended to address VAT avoidance via offshore looping, predominantly in the insurance sector. Read more.

VAT Notice 700/22: Making Tax Digital

On 13 July 2018, HMRC published “VAT Notice 700/22: Making Tax Digital for VAT”, which provides guidance on digital record keeping and return requirements for Making Tax Digital for VAT. Read more.

Cases

Pertemps: Expenses salary sacrifice scheme not an economic activity for VAT purposes

In Pertemps Limited v HMRC, the First-tier Tribunal (FTT) has held that a salary sacrifice scheme providing travel and subsistence expenses to employees was not an economic activity for VAT purposes. Read more.

Adecco: VAT payable on supply of non-employed temporary workers

In Adecco UK Limited and others v HMRC, the Court of Appeal has confirmed that VAT was payable on the supply of non-employed temporary workers to clients. Read more.

Allpay: Application by HMRC to amend its Statement of Case

In Allpay Limited v HMRC, the First-tier Tribunal (FTT) has dismissed HMRC’s application to amend its Statement of Case to plead a new legal issue and awarded the taxpayer its costs. Read more.