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Highlights from the broader tax news for the week ending 2 November 2022, including: an update on plastic packaging tax; the VAT treatment of children’s face masks; and Charter performance indicators.

Plastic packaging update

HMRC has determined that reusable plastic crates fall within the definition of transport packaging and are therefore exempt from plastic packaging tax when imported into the UK filled with goods.

HMRC has updated its guidance to reflect this position.

VAT treatment of children's face masks

HMRC released Revenue and Customs Brief 11 (2022) (RCB 11/22) on 24 October 2022, setting out HMRC’s revised position regarding the VAT treatment of children’s face masks.

Having reviewed the evidence, HMRC now accepts that face masks are items of clothing. Where face masks are specifically designed and held out for sale to young children under the age of 14, they will be subject to the existing zero rate of VAT for children’s clothing.

Businesses that have previously treated sales of children’s face masks as taxable at the standard rate can reclaim VAT by following the guidance outlined in section 2.2 of VAT Notice 700/45. RCB 11/22 should be quoted on any VAT652 or claim letter submitted.

HMRC performance

HMRC has published a new document, Charter performance indicators, a collection of information from HMRC’s annual report and accounts and surveys of businesses, individuals and agents. The information provides a comparison of performance between 2021/22 and 2020/21; disappointingly, but not surprisingly, the data shows poorer performance on just about every measure.

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