Value Added Tax
|
From |
1
April 2006 |
1
April 2005 |
|
Standard rate |
17.5% |
17.5% |
|
VAT fraction |
7/47 |
7/47 |
| |
Turnover |
Turnover |
|
Registration |
last 12 months or next 30
days over |
£61,000 |
£60,000 |
|
Deregistration |
next 12 months under |
£59,000 |
£58,000 |
|
Cash accounting scheme |
up to |
£660,000 |
£660,000 |
|
Annual
accounting scheme |
up to |
£1,350,000 |
£660,000 |
|
Optional flat-rate scheme |
up to |
£150,000 |
£150,000 |
|
Anti-avoidance measures
In order to combat Missing Trader
International Fraud, dependant upon EU agreement, the person responsible for
accounting for VAT on the sale of certain goods such as mobile phones, computer
chips and other similar electronic items, will be changed from the seller to the
purchaser.
From Royal Assent to the Finance
Bill 2006, HM Revenue & Customs will be able to direct that additional specified
records be kept such as mobile phone IMEI numbers. The existing powers of HM
Revenue & Customs to inspect and mark goods will also be clarified.
With effect from Royal Assent to
the Finance Bill 2006, new rules to specify circumstances where credit vouchers
become liable to VAT will be introduced to combat schemes where no VAT is ever
levied.
Reduced
rate extension
From 1 July 2006 the sale of all
contraceptive products, including sales by retailers, vending machines and the
internet will be liable to the 5% reduced rate. Products supplied by medical
practitioners or health professionals will be unaffected by this measure.
Partial
exemption
Businesses that operate special
methods rather than the standard method, will be required to declare and
demonstrate that the method proposed is fair and reasonable before it will be
approved. In addition the rules for the recovery of VAT for partly exempt
businesses making overseas supplies will be simplified. These measures will take
effect from April 2007.
Option to
tax
From Royal Assent to the Finance
Bill 2006 the option to tax provisions will be made clearer and easier to use.
New appeal rights for refusals will be introduced.
Supplies
of goods under finance agreements
The right of finance companies to
treat returned goods as “neither a supply of goods nor services” and thus avoid
charging VAT on the second sale, is to be removed. This will apply to cars and a
wide range of goods where VAT on the first sale can be adjusted. The changes
apply to agreements entered into on or after 13 April 2006 where the goods are
delivered on or after 1 September 2006.
Church and
faith buildings
The refund scheme for certain
works will be extended to 2010/11, and will include professional fees and
fixtures and fittings such as bells, pews, organs and clocks.
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