39ab4ed9 8bd9 45de b89d efb54b1b1db8 800x380 - Further support for charities from VAT receipts

Further support for charities from VAT receipts

It has been revealed by HM Treasury that the VAT collected on donated personal protective equipment (PPE) will be given to charities supporting the NHS and care workers. This measure will apply to all the VAT collected on donations made from 1 March until 30 April – the period between PPE donations starting and when the temporary zero VAT rate on PPE became effective on 1 May 2020.

The government donation will be made to support frontline workers affected by Covid-19 equally through the Care Workers Charity and NHS Charities Together. The donation which will be equivalent to the VAT collected is expected to be worth between £500,000 to £1 million. The Department for Health and Social Care will make the donation of the VAT on the government’s behalf.

Chief Secretary to the Treasury Steve Barclay said:

'Frontline health workers are fighting Coronavirus day in, day out – in our hospitals, care homes and communities. Whilst we will never be able to fully express our gratitude to them, we want these donations to be a small sign of our appreciation. From the Treasury and the whole government, we say thank you for all you are doing.'

Source: HM Treasury Wed, 27 May 2020 05:00:00 +0100
1c119923 da1c 45eb 9df2 12b235ac5656 800x380 - No VAT on supply of PPE

No VAT on supply of PPE

The government has introduced a zero-rate of VAT on the sale of personal protective equipment (PPE) for Covid-19. The temporary measure will apply from 1 May 2020 until 31 July 2020 unless any further extensions are announced. This move will save care homes and businesses dealing with the Coronavirus outbreak more than £100 million.

The government is acting under an exceptional basis allowed by EU rules during health emergencies. The European Commission recently indicated support for member states to introduce temporary VAT reliefs to mitigate the impacts of the Covid-19 pandemic. The UK remains bound by EU VAT law until the end of the transition period.

Products covered by the zero rate include:

  • disposable gloves
  • disposable plastic aprons
  • disposable fluid-resistant coveralls or gowns
  • surgical masks – including fluid-resistant type IIR surgical masks
  • filtering face piece respirators
  • eye and face protection – including single or reusable full face visors or goggles

The reduction in VAT will particularly benefit care providers, who are often unable to reclaim the 20% VAT they incur on their purchases.

Source: HM Treasury Wed, 13 May 2020 05:00:00 +0100

New VAT rules coming into effect on 1st October 2019 – are you ready?

The domestic reverse charge (referred to as the reverse charge) is a major change to the way VAT is collected in the building and construction industry.

This will affect you if you supply or receive specified services that are reported under the Construction Industry Scheme (CIS).

vat rules 300x182 - New VAT rules coming into effect on 1st October 2019 - are you ready?It comes into effect on 1 October 2019 and means customers receiving the service will have to pay the VAT due to HMRC instead of paying the supplier.

It will only apply to individuals or businesses registered for VAT in the UK (although it will not apply to consumers).

What you need to do to be ready for the start of the
domestic reverse charge

You need to prepare for the 1 October 2019 introduction date by:
• Checking whether the reverse charge affects either your sales, purchases or both.
• Ensuring your accounting systems and software are updated to deal with the reverse charge.
• Considering whether the change will have an impact on your cash flow.
• Ensuring all your staff who are responsible for VAT accounting are familiar with the reverse charge and how it will operate.

What contractors need to do

If you’re a contractor you’ll also need to review all your contracts with sub-contractors, to decide if the reverse charge will apply to the services you receive under your contracts. You’ll need to notify your suppliers if it will.

What sub-contractors need to do

If you’re a sub-contractor you’ll also need to contact your customers to get confirmation from them if the reverse charge will apply, including confirming if the customer is an end user or intermediary supplier.

For further information please do not hesitate to contact one of the team on 01277 314000.

2017 07 13 649437 800x380 - VAT relief on building a new home

VAT relief on building a new home

The VAT DIY Housebuilders scheme is a special scheme that enables homeowners building a home to benefit from the special VAT rules that allow the qualifying construction costs of new homes and certain conversion works to be zero-rated. In this way, any VAT paid on certain qualifying costs can be recovered. The scheme has been designed to effectively put homeowners in a similar position to a property developer.

A claim can be made for qualifying building materials on which VAT has been charged. Qualifying materials include most materials incorporated into a new building or conversion which cannot be easily removed. There are a number of exceptions including fitted furniture, carpets, and some domestic appliances.

Homeowners can also claim for building materials purchased from another EU member state by converting the amount of VAT paid into the sterling equivalent and providing proper evidence of shipping etc. It is not possible to claim the VAT for any professional or supervisory services associated with the development.

Planning note: There are also time limits that should be adhered to when making a claim. A claim must usually be made within three months of the completion of the conversion or new building using the appropriate form. A repayment is usually made within 30 days of a claim being submitted.

There are two main forms for making a claim. The first form (VAT 431NB) is designed for new builds and the second form (VAT431C) is designed for qualifying conversions i.e. the conversion of a non-residential property to residential.

Please call if you would like help applying for a rebate of VAT using this scheme.