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VAT

Frequently asked questions from Markel Tax on value added tax.

Note these FAQs were correct at the time of going to press and should be considered as principles based guidance. To check current validity, call the Markel Tax helpline.

New penalty system for late VAT returns

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January 2023

FAQ on a client who is behind with both submitting and paying his VAT returns and not able to pay VAT due for the 12/22 VAT period, thus incurring a default surcharge. It looks at what will happen if he does not submit and/or pay his VAT return for 03/23 on time.

Place of supply of repair services

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December 2022

FAQ on whether VAT is chargeable on a vehicle repair carried out by a UK-based UK VAT registered car garage. The vehicle is insured by a Netherlands-based insurer, but is used for transporting goods from its UK supplier to customers all over the UK.

TOGC relevant date

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November 2022

FAQ on whether a client buying a commercial property rental business by way of an outside-the-scope of VAT Tranfer of Business as a Going Concern (TOGC) needs to notify HMRC of his Option to Tax (OTT) on the property.

Claiming VAT back as input tax

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October 2022

FAQ on whether a client's company can claim the VAT back as input tax on a motorhome, which will be used instead of hotels when the client is on business trips (although there will also be a small percentage of leisure use).

VAT and green home improvements

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September 2022

FAQ on the VAT liability for energy saving home improvements, looking at the case of a client who had solar panels installed on his house in 2022.

Margin scheme

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August 2022

FAQ on whether a client who ordinarily sells second hand goods and ordinarily accounts for VAT under the margin scheme, can charge VAT at the request of one of his customers.

VAT zero rating and construction

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July 2022

FAQ on whether a client, who bought a group of residential new build flats at VAT zero-rating, can claim VAT on agent fees if he sells them on empty, as new-builds.

Making Tax Digital

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June 2022

FAQ on whether a client who is UK VAT registered on a voluntary basis ,and who currently keeps records manually, will soon be obliged to switch to operating under MTD rules.

VAT and charitable donations

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May 2022

FAQ on whether money donated to charity from the sale of luggage and accessories falls outside the scope of VAT.

VAT groups

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April 2022

FAQ on what to do in the interim period while HMRC is processing and application to form a new VAT group.

VAT on service charge

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March 2022

FAQ on the liability for VAT on a service charge applied by a restaurant, depending on whether the charge is optional or compulsory.

Place of Supply and other VAT implications

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February 2022

FAQ on what counts at the Place of Supply (POS) for goods moved between two continental European countries, by a UK based contractor.

VAT on commission income

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January 2022

FAQ on whether the commission income on sales of third party art by a gallery owner falls below the VAT threshold.

VAT exemption for services provided to a charity

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December 2021

FAQ on the VAT status of a charity that is employing the services of a carpet fitter who is installing carpets in an existing commercial property.

Electric charging points

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November 2021

FAQ on what rate of VAT should be applied when a client charges an electric vehicle using a commercial charging point at a petrol station, whilst travelling for business.

Time limits for correcting VAT errors

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October 2021

FAQ on the rules around time limits for correcting VAT errors and backdated VAT claims, looking at the case of a company who received invoices for 6 years worth of VAT from a previously non-VAT registered supplier.

VAT – Pre-registration

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September 2021

FAQ about a client who has gone over the VAT registration threshold for the first time and wants to join the Flat Rate Scheme immediately, but there is concern that they won't be able to get any pre-registration VAT back unless it meets the FRS capex criteria.

VAT – Imports

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August 2021

FAQ about whether a client, who bought and imported some furnishings from the EU, should have paid VAT on the imports. They were not charged VAT by the supplier or freight carrier.

VAT – Option to Tax

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July 2021

FAQ about the VAT implications for a client who is a residential property developer looking to buy a plot of land where the vendor has opted to tax, and whether the client can disapply the vendor’s OTT.

VAT – Making Tax Digital

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June 2021

FAQ about a ‘soft landing’ for not having digital links when submitting VAT returns to HMRC. The firm in question has two strands to their business and for one of them, the accounts data has to be entered in to the MTD portal manually.

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