United Kingdom

VAT grouping change when goods are transferred to Northern Ireland VAT grouping is often deployed in the UK when two or more eligible taxpayers are treated as one ‘person’ for VAT purposes. This can bring multiple advantages, including avoiding the need to pay VAT when transacting between members of the same group, and less cumbersome VAT-related administrative obligations. UK VAT groups can currently contain members established in both Great Britain and Northern Ireland. Supplies between members of a VAT group generally are disregarded for VAT purposes. However, further to VAT notice 700/2, specifically section 7.3.2, when goods now move from Great Britain to Northern Ireland, VAT will now be due. This will be calculated in the same way as when a business moves its own goods.

Reporting for digital platforms from 2024

Further to the consultation on the implementation of the Organisation for Economic Co-operation and Development (OECD’s) Model ‘Reporting rule for digital platforms’, the UK government has announced that new UK reporting requirements will be introduced.

These will take effect from 1^st January 2024, with first reports expected to be submitted by the end of January 2025.

There has been a substantial amount of feedback during the consultation. HMRC is collating this and striving to publish the government response to the consultation along with draft regulations providing details of the new regime.

To ensure implementation of the regulations is in a ‘proportionate and effective manner’, HMRC will engage with digital platforms and their providers before the regulations come into effect. It is hoped this prior interaction between the regulatory bodies and digital providers will engineer a smooth adoption of the regulations.

New VAT fuel scale charges HMRC has announced some new VAT fuel scale charges applying from 1 May 2022. These can be found via the following links: VAT road fuel scale charges from 1 May 2022 to 30 April 2023 - GOV.UK (www.gov.uk) https://www.vatupdate.com/2022/04/23/new-vat-fuel-scale-charges-from-1-may-2022/

Online sales tax for e-commerce The UK Treasury is considering whether a 1% online sales tax needs to be applied on e-commerce goods and services. The e-commerce trade has seen a radical increase – fuelled significantly by the Covid-19 pandemic- and it is no coincidence that the government is reviewing its fiscal measures at a time when e-commerce has grown exponentially over the past 2 years. An open consultation to this effect has been launched from 25 February 2022 until 20 May 2022. The proposal of the online sales tax aims to rebalance the taxation of the retail sector between online and in-store retail. Information on the public consultation policy can be found via the following link.

VAT hospitality rate We communicated in 2020 that the UK has reduced its VAT rate for the hospitality sector from 20% to 5%. From 1^st April 2022, the VAT rate will revert to 20%, fuelling the indication that the United Kingdom is entering a post-recovery era of the pandemic.

Isle of Man Notice on Plastic Packaging Tax (PPT)

The Isle of Man fiscal structure is virtually identical to that of the United Kingdom – and so it isn’t surprising to see that the Isle of Man Treasury have published some guidance on the UK Plastic Packaging Tax (PPT).
This guidance includes a link to the UK HMRC website, which provides detailed information relating to PPT. The link can also be accessed here.

Temporary standard tax rate of 12.5%

The UK government approved a VAT increase for the hospitality sector to 12.5%, effective 1 October 2021. This will apply until 31 March 2022.
The VAT rate for hospitality was temporarily reduced to 5%, and this reduced rate was extended until 30 September 2021. The temporary 12.5% was introduced to manage the proposed eventual transition back to the original 20% VAT rate.
Tungsten Network has included the new 12.5% rate in our system.

Extension of hospitality and tourism VAT reduction

The UK Chancellor is again extending the VAT reduction on Hospitality and Tourism from 20% to 5% until 30 September 2021. It will then be reduced to 12.5% until April 2022 to help businesses in gradually moving back to the standard rate.

Extension of hospitality and tourism VAT reduction

The UK Chancellor is again extending the VAT reduction on Hospitality and Tourism from 20% to 5% until 30 September 2021. It will then be reduced to 12.5% until April 2022 to help businesses in gradually moving back to the standard rate.

HMRC VAT identification validation checker

As the VIES VAT identification check will no longer be available in UK post Brexit, HMRC has launched its own VAT identification validation checker. To access the tool, please follow this link.

HMRC VAT identification validation checker

As the VIES VAT identification check will no longer be available in UK post Brexit, HMRC has launched its own VAT identification validation checker. To access the tool, please follow this link.

The UK extends its reduction of the VAT rate for tourism and hospitality

The temporary VAT rate reduction to 15% VAT for the tourism and hospitality sectors will be extended up to the end of March 2021.

The UK extends its reduction of the VAT rate for tourism and hospitality

The temporary VAT rate reduction to 15% VAT for the tourism and hospitality sectors will be extended up to the end of March 2021.